SMC sets record expansion of beer, food units

San Miguel Corp. is building five to six new breweries all over the country and at least 17 new food facilities including a plant that will locally produce the iconic Spam brand.

The company has set aside P742 billion from 2017 to 2019 to fund an ongoing capacity expansion touted as the largest expansion in its history.

In a press conference after the company’s annual stockholders’ meeting, SMC president and chief operating officer Ramon Ang said the company’s capacity expansion for its food and beverage segments is underway even as it continues with its diversification into other businesses.

“We are building five to six breweries in different areas. This would bring down logistics cost,” Ang told reporters.

The company is building the breweries in various areas including La Union, Laguna, Quezon, Bicol, and Misamis Oriental.

SMC can spend as much as $1.5 billion for up to six breweries or $250 million each.

The beer business is SMC’s first business. The company started as La Fabrica de Cerveza de San Miguel, which was Southeast Asia’s first brewery, producing and bottling what would eventually become one of the best selling beers in the region and among the world’s top beers.

San Miguel has since diversified into other beverages, food, packaging, fuel and oil and in recent years, power and infrastructure. It is one of the country’s largest conglomerates, generating about 5.1 percent of the gross domestic product in 2015.

For the food business, Ang said the company would also build at least 17 feed mills and facilities for processed meat including a plant that would manufacture Spam.

Ang said the company, through PureFoods, has the license to manufacture Spam for the Philippines and the region.

Spam is a brand of canned cook meat from US giant Hormel Foods Corp.

“Our first order of business is to kick into higher gear the largest expansion of our food and beverage businesses. We’ve never lost sight of the importance of our older businesses as the ballast to our growth,” Ang said in his message to shareholders.

“Over the years, we’ve worked to continuously strengthen not just our leadership in the markets we’re in, but also our capability to meet the changing needs of a growing consumer base. Our ability to meet demand for our products is key to our long-term competitiveness, he added.

“The expansion of our food business is unprecedented and unparalleled in scale, with a total of 17 new facilities consisting of food mills, poultry processing plants, processed meats facilities, dairy plants, flour milling and ready to eat facilities,” Ang said.

This year, the group has already completed and inaugurated a new hotdog manufacturing facility in General Trias, Cavite – effectively doubling its capacity – and two feed mills, one in Mariveles, Bataan and another one in Bulacan province, he added.