SMC eyes $16-M Cambodia brewery

San Miguel Corp. (SMC) will study the feasibility of putting up a $16-million brewery in Cambodia, SMC beer division assistant vice president for special projects international Benjamin Y. Aton Jr. said yesterday.

According to Aton, SMC views Cambodia as a “good market” that can offer much better profit margins than China.

The feasibility study will take two years from 2008.

SMC is adopting a new business model in Cambodia, one in which it will be more involved in building up its brand. In China and in other Asian countries SMC is relying primarily on the dealer without getting involved in building up the SMC brand.

According to Aton, a small brewery with a production of 200,000 hecto liters, would cost around $16 million without counting the cost of the land.

Meanwhile, SMC is set to start exporting its Pale Pilsen brand to Cambodia in January next year, Aton said, adding that the east Asian country is a “good market” because Cambodians like to drink a lot of beer as a means of enjoyment following several years of war.

Furthermore, Cambodia offers higher profit margins that in China where SMC’s Chinese dealers are seeking ever larger discounts, thus squeezing SMC’s bottomline.