• SMFB to launch new products, market variants

San Miguel Food and Beverage Inc. (SMFB) plans to launch new products, and market variants to maintain its position as the country’s biggest consumer company.

The new food, liquor and beer products, as well as new market strategies, would allow SMFB to continue to further gain market share and grow even bigger despite its already huge size, SMFB chief finance officer Ildefonso Alindogan said last week during the company’s investors’ briefing for its follow-on offering.

“We will launch new products and market variants where we see the need,” he said.

The company would continue to craft market strategies that would allow it to gain further market share in various categories, Alindogan added.

He said that from 2015 to 2017, the company’s revenue CAGR has grown by 11 percent, while EBITDA has grown by 15 percent – an indication that the company continues to grow healthy despite the size of the business.

Revenues last year reached $4.7 billion, 87 percent of which were derived from categories where SMFB holds the top position.

“SMFB is number one in beer, number one in gin, number one in Chinese wine and number one in four food categories,” he said in his presentation.

SMFB is the consolidated food and beverage businesses of conglomerate San Miguel Corp.

The consolidation of SMC’s food and beverage businesses would allow the conglomerate to optimize market value and cost synergies, including logistics, freight, advertising and promotion costs, Alindogan said.

These measures, he said, would enhance profitability.

“All told, SMFB is the definitive proxy for the Philippine growth story,” Alindogan said.

In all, SMFB is expanding its capacity by building five to six new breweries and 17 new food facilities.

For the food business, the company is setting aside roughly P2 billion for a new “ready-toeat” plant in Laguna, which it hopes to be ready in the first half of next year.

The facility is a response to the growing market for ready-toeat food in the country. It would be able to produce ready to eat meat, fish and vegetable viands and rice. This will be sold in packages, similar to those already available in convenience stores and groceries.

SMFB has a capex of P742 billion from 2017 to 2019 for the construction of the new breweries and food facilities.

SMFB hopes to raise up to P39 billion from its ongoing follow on offering, which has been priced at P85 per share.

It has an offer size of 461 million shares including an over-allotment option of 61 million shares.

The proceeds to be raised from the offering would be used for investments in the San Miguel Group, including capital and funding requirements of future projects.