San Miguel sets P10 billion for expansion, new ventures

MANILA, Philippines - San Miguel Corp. (SMC), Southeast Asia’s largest food and beverage conglomerate, plans to spend nearly P10 billion to beef up the existing capacities of its food and feeds facilities  as well as venture into new businesses like broadband service and water supply.

San Miguel president Ramon S. Ang said P4.89 billion of the P10 billion will be channeled to the expansion of Monterey’s hog farms and another P3.37 billion to raise the capacity of Magnolia Corp.’s poultry farm.

The company is allotting P840 million for the expansion of its animal feeds business to produce an additional 3.8 million bags.  

Ang said San Miguel is setting aside P215 million for the construction of a Magnolia ice cream plant which will churn out five million gallons. Another P231 million will be spent to increase Purefoods-Hormel Corp.’s chicken nuggets line.

The San Miguel chief likewise revealed that the company will soon provide broadband and high-speed Internet service using Meralco Broadband over Power Lines (BPL).

By bundling radio frequency energy on the same line with an electric current, data can be transmitted without the need for a separate data line.  Power companies have used this technology for years to monitor the performance of power grids.

With BPL, users can plug their computer into any electrical outlet in their home and instantly have access to high-speed Internet.

Ang said the company, through wholly-owned unit San Miguel Bulk Water Co., has also submitted a $1.2-billion proposal to the Metropolitan Waterworks and Sewerage System (MWSS) for the development of the Laiban Dam in Tanay, Rizal.

Ang said the company intends to provide sufficient water supply to 25 million people in the Greater Manila Area through the proposed Laiban Dam project.

The project will include the construction of the dam and headworks, raw water conveyance facilities, water treatment plant, hydropower plant, treated water conveyance facilities, pumping stations, storage facilities and offtake points

Ang said the company is also committed to provide more affordable gas and petroleum products to Filipinos.

San Miguel acquired in December last year the Government Service Insurance System’s 27 percent stake in power utility giant Manila Electric Co. It also secured the exclusive option to purchase up to 50.1 percent of oil refiner Petron Corp. This option is exercisable over a two-year period.

Ang said the conglomerate is hoping to complete the acquisition of Petron shares within the year.  

Ang said that while the group’s main priority is to invest in the country, it is still open to other opportunities overseas.  ”If and when there is opportunity outside the Philippines, that is going to be considered.  Whatever opportunity that we can add to the shareholders value of San Miguel, we will review,” Ang said.

The conglomerate’s expansion program is expected to create at least 500,000 new direct and indirect jobs.

Meanwhile, San Miguel Brewery Inc., the flagship domestic brewery firm of San Miguel, will launch a peso-denominated bond issue within the month to raise at least P38.8 billion to fund the acquisition of the parent firm’s beer brands and properties.

Ang said San Miguel Brewery has decided to put off its planned dollar bond offering and instead issue peso bonds.