February 5, 2015
San Miguel Pure Foods spreads its wings in Southeast Asia
San Miguel Pure Foods Co. Inc., the food and fee production unit of the leading Philippine conglomerate San Miguel Corp., is on expansionary mode.
Within the next to three years it plans to spend US$178 million to $222.5 million a year to expand to other countries in the Association of Southeast Asian Nations (Asean), which becomes economically integrated later this year.
Pure Foods--which sells feeds, fresh and processed meats, flour and dairy products--says it will build new facilities in Indonesia and Vietnam as well as establish presence in Malaysia and Thailand.
The company, according to Pure Foods president Francisco Alejo III, has been in negotiations with potential foreign partners for possible acquisitions.
In late January 2015, San Miguel Pure Foodsdisclosed it had bought out the 49% stake held by Hormel Netherlands BV in the Vietnamese hog farm and feeds and meat producer San Miguel Hormel (Vn) Co. Ltd., which is incorporated in Vietnam.
With the acquisition, it gained full control of the company as its British Virgin-based unit-San Miguel Pure Foods International Ltd.--already owned 51% of it.
Besides Hormel, San Miguel Pure Foods has partnerships with Singapore-based Super Coffee Corp. Pte. Ltd and Penderyn Pte. Ltd.
The expansion plans are not limited to its foreign operations. Domestically, it plans to build 10 new facilities this year to increase the production capacity of its flour mills, nuggets, hotdog, feed mill and poultry businesses.
"With the planned expansion plans, we are poised to take advantage of the opportunities when the market improves," Alejo tells a local newspaper.
Feeds production
Pure Foods'' feeds production is handled by its subsidiary San Miguel Foods Inc., which accounts for 14% of the Philippine total feed output.
San Miguel Foods has built, through the years, an extensive network of third party-owned and -operated facilities that include feed mills, farms, hatcheries, processing plants, warehouses, distribution networks, and a nationwide infrastructure of branded retail outlets selling pork, beef and chicken.
It markets animal and aquatic feeds under the B-Meg brand. In 2013, San Miguel Corp. opened a $55.6-million bulk grains terminal in Mabini, Batangas, which reduced the company''s production costs and boosted margins.
The terminal can handle 24 to 30 Panamax vessels in a year. It serves San Miguel Foods'' 41 feed plants around the country as well as other importers outside of the San Miguel group.
San Miguel Foods'' milling operations grind roughly 25,000 tonnes of corn per month, or 300,000 metric tonnes of corn a year. Corn constitutes 70% of the mixed-feeds ratio.
Most of the feeds it produces go to its own livestock operations. The rest are sold in the marker and to smaller livestock producers.
San Miguel Foods recently expressed interest in developing partnerships for the domestic production of cassava, grain sorghum, sweet potato and other crops for its feed mill facilities nationwide.