SMC chairman and chief executive officer Eduardo M. Cojuangco Jr. said the purchase is a "terrific complement to our existing portfolio and is consistent with the group’s strategy to acquire businesses with strategic fit with its core categories."
The move is in line with SMC’s aggressive overseas expansion program, aimed at seeking offshore growth to complement its dominant foothold in the local beverage market.
Riding high on the significant gains of its domestic and international beer operations, SMC reported a 31-percent growth in its first semester net income this year to P4 billion.
The SMC official said the strong performance was driven by higher consolidated sales revenue of P81.28 billion, an increase of 13 percent from the previous year’s level.
Berri holds a 50-percent share of the fruit juice market in Australia and around 65 percent of the country’s fast growing "fresh juice" segment. Its brands include Berri, Daily Juice, Fruitful Australian Fresh, Just Juice, Mildura Sunrise and Mr. Juicy.
Aside from juices, Berri also produces bottled water under the Kyneton Mineral Water and Summit Water brands.
"With Berri, we are better positioned to build on the many opportunities we see for convenient beverages throughout the Asia-Pacific. We hope to be able to accelerate the regional distribution and growth of Berri products," Cojuangco said.
"We are committed to providing Berri with the resources and opportunities they need to grow, while sustaining and enhancing their leadership in their home market," he added.
For her part, Berri chief executive officer Alison Watkins said SMC’s investment was "a natural fit that both companies stand to benefit."
"For Berri, the new partnership will spur market presence into key Asian markets such as Thailand, Vietnam, Indonesia and China. Developing these markets has always been an integral part of Berri’s growth strategy," Watkins said.
Berri’s brands will provide a strong complement to SMC’s stable of internationally-recognized alcoholic beverages, including the flagship beer and hard liquor brands San Miguel Pale Pilsen and Ginebra San Miguel, respectively.
SMC first established its presence in Australia in April 2000 with its acquisition of J. Boag & Son, a leading brewer of premium beer.
In the first half of 2004, SMC’s consolidated operating income jumped 32 percent to P8.11 billion, largely due to higher beer volumes, the fixed cost containment of the Coca-Cola Beverage Group, and the significant improvement within the food group.
SMC’s domestic beer division posted an operating income of P4 billion or 25 percent higher than the year-ago level. Total revenues rose 22 percent to P18.3 billion on a beer volume growth of 19 percent over last year.
SMC sells nine out of every 10 bottles of beer in the Philippines, with domestic sales accounting for a fifth of the company’s total revenues. The company also accounts for 90 percent of the carbonated drinks market, 58 percent of the powdered juice, 56 percent of hard liquor and at least 80 percent of margarine and butter.
International beer sales volume, on the other hand, grew 17 percent in the first half this year with sales revenue reaching $120.1 million.
SMC reported that substantial progress has also been achieved in its regional expansion program with successive groundbreaking activities for new facilities in Thailand, Indonesia and Vietnam. The expansion signifies the company’s confidence in its products and brands.
The conglomerate exports its products to over 30 countries, mainly concentrated in the Asia Pacific region.