E-Malt.com News article: 3199

Philippines: San Miguel Corporation – regional expansion. “In the Philippines, we are the leader in each of our three core businesses—food, beverage, and packaging. With our position consolidated in the domestic market, we have to move forward to build on the businesses that we have today in the region,” SMC Chairman and CEO Eduardo M. Cojuangco, Jr. said in a speech about the Company’s aggressive regional expansion program and the key to its success in the larger Asia-Pacific.

”We see enormous growth potential, particularly in the seven countries that we’ve identified for expansion—Indonesia, Vietnam, Thailand, Malaysia, China, Taiwan, and Australia. The demographics are encouraging. We’ve taken a look at levels of consumption for our targeted new businesses and we see that there is plenty of room for these levels to rise in the markets we’ve selected.”

“We look forward to further opening our core business to new horizons in terms of both products and geographic reach and rounding out our consumer offerings in each market.”

How were these countries selected? – “We already have operations in four of the seven countries. These are in China, including Hong Kong, where we have four breweries and two packaging facilities; Indonesia, where we have a brewery, a packaging facility, and a food facility; Vietnam, where we have a brewery and two packaging facilities and Australia, where we own a brewer.”

“San Miguel used to produce beer and dairy products in Taiwan so we are not entirely strangers to that market. It is only in Malaysia and Thailand that we did not have a presence, although recently, we acquired the physical assets of Thai Amarit Brewery.”

“Given the demographics of overseas food and beverage industries, we see enormous potential for our products in Asia’s emerging markets. We have set our sights on the vast regional opportunity in convenient beverages and food. Per capita consumption for these products in many of these markets is still well below the developed world and shows good growth potential.”

“So on the whole, these are familiar markets to us and highly attractive ones—among the fastest growing in the world. Australia, Malaysia, and Taiwan are far more developed, while China, Thailand, Indonesia, and Vietnam have a burgeoning middle class with strong buying power.”

San Miguel is more widely known for its beer products abroad. Why launch non-alcoholic beverages and food products? – “Consumers, whether they’re in the Philippines or throughout the region, recognize quality. That’s certainly one of the reasons our beer has become so popular and among the top beers in Asia. I think the same will hold true for our other products. We have a history of establishing strong brands and great products. But more important, we’ve made it our business to understand our consumers. We’ve proven our ability to stay close to our consumers at home and we’re confident that we can extend this strategic capability overseas. Over the last year, we’ve conducted a lot of independent research and have gained broad and deep insights around consumer segments and market opportunities in our target countries.”

“So we’ve done our homework and we have people on the ground studying consumer behavior. Having put considerable effort into deepening our knowledge of individual markets to ensure that we develop products that will meet our consumers’ unique needs, we’re now confident that we have in our arsenal, products and brands that will appeal to a variety of regional tastes.”

“Yet we also know that we’ve got to improve significantly in some areas to increase the chances of our success. We need faster speed to market. We need to learn how to standardize our manufacturing systems to be able to consistently deliver the same quality we have become famous for at home in these new markets. We need to improve how to move more quickly to be able to transfer technologies and learnings from one country to another and from one core business to another.”

How does San Miguel intend to replicate its success in the larger Asia-Pacific? – “We’ve said that we are going to grow in various ways. Through greenfield operations and through acquisitions throughout the region. Through developing exciting, value-for-money, quality brands and products, and leveraging on our expertise in logistics and distribution.”

“Our brands enjoy the loyalty and trust of consumers in the Philippines and increasingly, throughout the region. We’ve been a leading brand in Hong Kong, South China, Indonesia, Australia. This strength has given us a continuing platform from which to launch new products, product extensions and it’s going to help us expand into new geographic markets. It’s certainly a challenging goal, but one well within reach.“

“Our Company is built on a history of quality and leadership that dates back more than a hundred years. Over that time, San Miguel has grown from simple beginnings to become the largest food and beverage company in Southeast Asia. In getting there, we’ve never lost sight of why we’re here—to help make everyday life a bit more special, a celebration.”


06 September, 2004