MANILA, Philippines - San Miguel Brewery Inc. (SMB), the flagship unit of diversifying conglomerate San Miguel Corp., is spending around P1 billion to put up a new bottling plant in line with an ongoing expansion program to further spur sales.
On the sidelines of the listing of SMB’s P38.8-billion worth of fixed-rate bonds on the Philippine Dealing Exchange (PDEX) yesterday, company president Roberto Huang said the new facility, located in Sta. Rosa, Laguna, will significantly boost capacity.
He said the company also expects to complete the purchase of San Miguel’s international beer business in the latter part of this year or early next year. The transaction is expected to fetch between $600 million and $700 million.
He said funding for the acquisition will come from a combination of debt and equity.
The listing of the bonds on the PDEx market will allow retail and institutional investors to enjoy the benefits of price transparency as well as liquidity of the bonds.
PDS Group president and chief executive officer Vicente B. Castillo said the listing marks the largest corporate listing to date in PDEx, bringing the volume of listed corporate debt securities to a total of P87.3 billion.
“The listing is historic for our capital market. We witnessed the unprecedented reception of the primary market to this bond issue and believe this listing demonstrates that our local issuers are becoming more secure in the secondary market infrastructure for their debt securities,” said Castillo.
SMB, which corners 95 percent of the Philippine beer market, produces and markets San Miguel Pale Pilsen, Red Horse, San Mig Light and five other affiliated brands.
To further grow sales, SMB continues to expand its coverage in areas that are currently underserved. “We have identified areas where we hold less than the national average market share,” Huang said.
The company also intends to take advantage of growing consumption in rapidly-urbanizing areas outside Metro Manila. Instead of just looking at the beer segment, SMB is hoping to capture a larger share of the total alcoholic beverage segment as Red Horse is being positioned to attract more hard liquor consumers, thereby increasing its slice of the market.
SMB is now 43.25 percent owned by Kirin Holdings Co. Ltd., Japan’s second largest brewery after acquiring 665.02 million shares held by San Miguel in for P58.9 billion or P8.841 each share.