San Miguel to manufacture Spam, to invest $1.5 billion in new breweries
Diversified conglomerate San Miguel Corporation (SMC) is investing up to $1.5 billion for the expansion of its beer bottling capacity while preparing to put up a food processing plant for the manufacture of Spam for the regional market.
In an interview after the firm’s annual stockholders’ meeting, SMC President Ramon S. Ang said these are part of the company’s massive R742-billion capital expenditures from 2017 to 2019 to expand its core food, beverage and petroleum businesses.
Ang said San Miguel Brewery, Inc. is building five to six new breweries, at a cost of $250 million each, around the country with the aim of reducing its logistics costs.
These will include a brewery at the border of La Union and Pangasinan, Sta. Rosa in Laguna, at the Quezon and Bicol area, Cagayan de Oro, and in Zamboanga.
“These will bring down the cost of logistics because now we have to bring the bottles to far away places,” said Ang adding that each brewery will have a capacity of two million hectoliters.
Ang said San Miguel Brewery is projected to register a 20 percent growth in operating income annually as it is coming from a low profit and low volume base.
Meanwhile, Ang said SMC is also finally making use of its license from partner Hormel to manufacture the popular Spam luncheon meat for both the domestic and regional markets.
“Hormel is our partner and we’ve had the license to manufacture Spam for 20 years already. However, we have not been able to focus on it until now,” he explained.
Ang said the manufacturing facility he will be putting up for Spam will have a capacity of 500 tons per day or 160,000 tons per year.
Aside from these, Ang said Petron Corporation has an ongoing expansion program to increase its refining capacity by 50 percent, from the current 180,000 barrels per day to 270,000 bpd.
The new 90,000 bpd capacity will consist mostly of aromatics and petrochemicals which enjoy higher margins than fuel.
San Miguel is also expanding its animal feeds production capacity by putting up six feed mills with a capacity of 1 million tons per year each. These include mills being put up in Mariveles, Bataan; Mabini, Batangas; San Ildefonso, Bulacan; Cagayan de Oro; Mandaue, Cebu; and Liganes, Iloilo.