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San Miguel Corporation

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Steven John Calizo

on 17 January 2014

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Transcript of San Miguel Corporation

San Miguel Corporation
Products & Services
San Miguel Brewery Inc. (SMB) is the largest producer of beer in the Philippines. San Miguel Beer was first produced by La Fabrica de Cerveza de San Miguel that began its operations in 1890. In 1963, the brewery was renamed San Miguel Corp. (SMC) to reflect its growing ventures into food and packaging. Today, SMC is the country's biggest diversified conglomerate.
San Miguel Pure Foods Company, Inc. offers a diverse array of food products spanning across the entire value chain ranging from B-Meg feeds and San Miguel Mills flour to Purefoods hotdogs, Magnolia chicken or Monterey ready-to-eat meat dishes.

Pure Foods offers an unrivalled breadth of food products that can be consumed during any time of the day, providing a comprehensive food solution to its customers, thereby building greater brand loyalty and prestige.
Fuel & Oil
Petron Corporation is the largest oil refining and marketing company in the Philippines. Supplying nearly 40% of the country’s oil requirements, the company’s world-class products and quality services fuel the lives of millions of Filipinos.

Petron’s vision is to be the leading provider of total customer solutions in the energy sector and its derivative businesses.
The San Miguel Yamamura Packaging Corporation provides a wide range of packaging solutions to various industries including food, pharmaceutical, chemical, beverages, and personal care.

The Packaging Group’s businesses are categorized into glass, metal, composites or flexible, plastics, PET and paper. Service offerings include graphics designing, packaging researching and testing, packaging development and consultation, contract packaging and trading.
Although initially established to be San Miguel Corporation’s corporate real estate arm, San Miguel Properties later diversified into commercial property development in market opportunities. Its current portfolio of projects includes mixed-use developments with economy to middle-income housing as its core products.

Among its real estate development projects: Bel Aldea, Maravilla, and Muralla in Cavite and Wedgewoods in Sta. Rosa, Laguna.
Power & Energy
In a relatively short period, San Miguel has built a vertically integrated power company with a full spectrum of power businesses comprising of IPPA contracts (through holding company SMC Global Power Holdings), mining assets, which supply raw materials to power plants, and a distribution (through Meralco) which distributes and sells electricity through a vast network in Luzon island.

Being a vertically integrated power company gives SMC the opportunity to compete and maximize value in key segments of the value chain by driving and capitalizing on synergies among fuel sourcing, power generation and power distribution.
Now on its 72nd year, Philippine Airlines is the country’s only full-service carrier. It is the first airline in Asia, founded on February 25, 1941. Over the last seven decades, PAL trailblazed many first in Philippine commercial aviation – first to cross to Pacific Ocean, first Southeast Asian airline to fly to Europe, first to fly to China when it reopened diplomatic ties, and many more.
Food giant San Miguel diversifies further

There is a strong diversification focus in San Miguel Corporation as part of its growth strategy and its chairman and CEO, Eduardo M. Cojuangco said:
“We are continuously benefitting from our strategic shift to high-growth businesses. We are confident we can bring in more value to our shareholders from the company’s ongoing diversification.”

He also said the company will be extracting synergies between its core businesses and its new acquisitions.

San Miguel Corporation is Southeast Asia’s largest publicly listed food, beverage and packaging company with over 100 major facilities throughout Asia-Pacific and its products are exported to 60 markets around the world. Its food and beverage business has been the stronghold and core focus since its establishment in 1890 as a brewery but the company now has focuses in new business areas such as fuel and oil, power and energy and mining.

San Miguel said the mix of its new businesses has already provided fast-growing streams of revenue. Its EBTDA is up 117% from 18.5bn pesos ($434m) in 2010 to 40.2bn pesos ($943m) in 2011. Cojuango said he has confidence that the company’s strategy of diversifying into non-allied industries will help spur economic growth and secure its future.
San Miguel began its diversification plan in 2007, and in April 2010 acquired Petron Corporation, beginning it fuel and oil venture. Petron is now the largest integrated oil refinery and marketing company in the Philippines and its refinery is being upgraded to allow full conversion of fuel oil production to higher-value products such as gasoline, diesel and petrochemicals.

The president and chief operating officer of San Miguel Corporation, Ramon Ang said:
“This acquisition provides us with a unique opportunity to expand our participation in the regional oil and gas sector, and we will focus our efforts not just on upgrading refinery capabilities, but expanding reach into underserved areas in the fuel markets.”

ExxonMobil is the largest international oil and gas company and has a long business history in Malaysia, dating back to 1893. This deal marks a refocusing of its operations. However, the company said it remains committed to Malaysia as a producer and supplier of crude, lubricants, asphalt, waxes and chemical products.
By Kacey Culliney 23-Aug-2011
New business ventures
SWOT Analysis
Asset leverage
Effective communication
High R&D
Loyal customers
Market share leadership
Strong management team
Strong brand equity
Strong financial position
Reputation management
No online presence
Management bench is not deep.
Lack of scale
Asset leverage
Emerging markets and expansion abroad
Product and services expansion
Economic slowdown
External changes (government, politics, taxes, etc)
Lower cost competitors or imports
Maturing categories, products, or services
Price wars
Product substitution
Video Commercial
Ginebra San Miguel, Inc. is the world’s largest gin producer by volume as well as the market leader in the domestic hard liquor market, with core products such as Ginebra San Miguel Gin, GSM Blue Gin and Gran Matador Brandy. It also produces and sells distilled spirits in Thailand under a joint venture agreement with Thai Life Group of Companies.
1964 to 1984
1984 to 1986
1998 to present
1986 to 1998
1918 to 1963
Early Years
Growth and expansion
1960s was a new era: the company's name was shortened to San Miguel Corporation, and Soriano died in 1964.
Antonio Roxas was elected chairman of San Miguel and Andrés Soriano, Jr. became president in 1964.
Soriano Jr. continued to diversify the food business during the early 1980s, expanding into poultry production in 1982, building an ice cream plant in 1983 and adding shrimp processing and freezing in 1984.
San Miguel encountered its first major competitor in the beer market in the late 1970s. That was when Asia Brewery Inc. entered the segment.
Soriano Jr.'s administration also witnessed battles for corporate control.
In 1983, Enrique Zóbel, a wealthy cousin of the Sorianos who owned the Zobel-Ayala real estate and banking group and was vice chairman of the San Miguel board, instigated a takeover on his own
hen Soriano Jr. died of cancer in 1984, Cojuangco scooped up the chairmanship of San Miguel in 1984
When Soriano Jr. died of cancer in 1984, Cojuangco scooped up the chairmanship of San Miguel in 1984
The Aquino administration sequestered Cojuangco's stake in San Miguel and agreed to let Andrés Soriano III run the company
Soriano III continued the company's program of expansion, acquiring majority control of La Tondeña Distillers Inc., the leading producer of hard liquor in the Philippines, in 1987 and adding beef and pork production to the company's food operations in 1988
Soriano III embarked on an internationalization program, hoping to expand into other countries
Soriano III allocated $1 billion to a five-year strategic internationalization program that focused on shaping up domestic operations, then progressing to licensing and exporting, overseas production, and finally to distribution of non-beer products.
San Miguel's beer exports grew by 150 percent from 1985 to 1989 alone, and the brand was soon exported to 24 countries
In 1996 San Miguel purchased full control of its Hong Kong arm, San Miguel Brewery Hong Kong Ltd.

A new Cojuangco era
Soriano III resigned in July 1998 and Eduardo M. Cojuangco, Jr. was elected chairman of San Miguel Corporation
San Miguel's first major acquisition under Cojuangco and Ang was Australian boutique brewer J. Boag and Son for A$96 million in 2000
In rapid succession beginning late 2008, SMC bought up shares in power retailer Meralco, paid up for the option to own oil refiner Petron, and acquired a majority stake in Liberty Holdings, a Filipino telco co-owned by Qatar Telecom.
In April 2012, SMC bought a 49% minority stake in Philippine Airlines (PAL) Holdings
Early years
1890 - La Fábrica de Cerveza de San Miguel was declared open for business.
By 1896, San Miguel beer was outselling by more than five-to-one all imported beers in the country.
The 1900s ushered in a period of prosperity after the Philippine Revolution and the beginning of the American Occupation
By 1914, San Miguel had branched out into the exporting business
Enter the Sorianos
In 1918, Don Andrés Soriano, was made acting manager.
The company opened in 1922 the Royal Soft Drinks Plant in Manila producing Royal TruOrange, other Royal products and aerated water
In 1925, San Miguel went into the ice cream business with the purchase of the Magnolia Plant
During the 1930s, San Miguel began investing in businesses overseas
In 1939, Don Andres Soriano was elected president of the corporation
Full transcript