SMC starts work on beverage plant in Indonesia

Food and beverage giant San Miguel Corp. (SMC) has broken ground for a new multi-product beverage facility in Indonesia, putting in full throttle its expansion in the Asia-Pacific region.

The new venture, PT San Miguel Indonesia Foods and Beverages, involves the manufacturing and distribution of ready-to-drink soft beverages. It is 85 percent owned by SMC and 15 percent by PT Delta Djakarta Tbk, SMC’s brewery in Indonesia.

SMC chairman Eduardo Cojuangco Jr. and president Ramon S. Ang led the groundbreaking ceremony at the MM2100 Industrial City in Bekasi Province, West Java, the site of the company’s new facility.

The groundbreaking came less than three months after a similar event in Thailand. More activities are scheduled within the year in Australia, Vietnam, China and Malaysia.

With the establishment of its newest manufacturing facility, SMC expects to be able to offer Indonesian consumers a wide range of choice in beverage products.

SMC said Indonesia’s huge beverage market has been growing at an average of 20 percent over the past five years. As of 2003, the per capita consumption of non-alcoholic beverages in Indonesia is 46 liters, which is comparable to Thailand’s 44.2 liters and the Philippines’ 70.2 liters.

"This new business reflects San Miguel’s full confidence in Indonesia as a fast-growing economy and manifests our continuing commitment to promote the best interests of consumers in this country," Cojuangco said.

SMC’s presence in Indonesia dates back to 1976 with a licensing arrangement to brew San Miguel Beer.

SMC began its brewery operations in 1993 when it bought into PT Delta Djakarta, one of Indonesia’s largest breweries. Its Anker Bir and Anker Stout brands currently enjoy a significant market share in the Indonesian market.

The conglomerate also manufactures and markets processed meats in the country through PT Purefoods Subah Indah, a joint venture with the Hero Group of Indonesia. Its Farmhouse and Vida hotdogs and sausages, cold cuts, burgers and other processed meats are rapidly gaining consumer acceptance and are major players in the country’s fast-growing processed meats industry.

SMC likewise has a plastics plant in Indonesia through PT San Miguel Sampoerna Packaging Industries, which produces and markets plastic crates and pallets.

The company said its increased presence in Asian markets would allow it to keep posting double-digit sales growth, even as economic activity in the Philippines remains sluggish.

SMC is Southeast Asia’s largest food, beverage and packaging company with over 100 facilities and operations in the Philippines, China, Hong Kong, Indonesia, Vietnam and Australia.

The company’s products, principally beer, are exported to over 20 countries in various regions throughout the world.

The conglomerate has earmarked up to $700 million for planned acquisitions and investments in Asia, aimed at seeking offshore growth to complement its dominant foothold in the local beverage market.

SMC posted a net income of P7.4 billion last year and is expected to earn P8.7 billion this year, helped by increased spending related to the May 10 national elections.