January 9, 2006

 

San Miguel considers consolidating its food business


 

Philippine conglomerate San Miguel is hoping to consolidate its domestic and regional food business under its recently acquired Australian subsidiary National Foods, announced San Miguel's president and chief operating officer Ramon Ang.

 

This is so that the company could become so "a more competitive, efficient and effective business," Ang explained.

 

On the acquisition of Australian dairy firm National Foods, Ang said that the move has made San Miguel "a major player in the regional food business and positions us for even greater growth in this part of our business," Mr Ang said.

 

The move will also enable San Miguel to further expand beyond its existing consumer product portfolio and lower procurement costs of basic raw materials.

 

From June to August last year, National Foods contributed 11 billion pesos (US$208.7 million) in revenues and 884 million pesos in operating income to San Miguel. However the A$1.9-billion takeover of National Foods--also San Miguel's largest offshore investment last year--hurt the conglomerate's bottomline.

 

Its after-tax profit dropped 6.1 percent to 5.23 billion pesos despite the 32-percent rise in turnover to 161 billion pesos.

 

San Miguel also incurred 3.28 billion pesos in financing charges for the loans it secured from foreign and local banks to help defray the costs of acquiring the Australian dairy company.

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