March 4, 2011

San Miguel Pure Foods eyes US$2 billion dollars revenues for 2011

San Miguel Pure Foods Co. Inc. (SMPFC), is eyeing sales revenues of over PHP90 billion (US$2.07 billion) this year, up from the PHP80.4 billion (US$1.85 billion) registered in 2010.

San Miguel president and chief operating officer Ramon S. Ang said the food unit is expected to perform better this year as it continues to expand its piggery, poultry and hog operations as well as acquire new brands.

Francisco Alejo III, president of SMPFC, said the company has set a PHP2-billion (US$46.11 million) capital expenditure program this year to further expand capacity.

Alejo said the company is looking to acquire a local and/or foreign food-related brand but declined to name them as negotiations are still ongoing.

He explained that while the company may invest in new businesses that San Miguel will venture into, SMPFC will remain a food company enjoying the support of its parent firm.

Ang said SMPFC is also planning to convert some convenience stores stationed at Petron stations into food stores that will sell SMPFC products. He said 25 locations, mostly in Metro Manila, have already been identified for future conversion into purely food stores, he said.

Petron, now majority owned by San Miguel, currently has 1,500 branches across the country.

SMPFC, currently one of the largest food firms in the country, owns some of the country's most popular brands including Pure Foods, Magnolia, Monterey, Star, San Mig Coffee and B-Meg.

Its main businesses are poultry, feeds, fresh meats, value-added meats, flour and dairy, spreads and oil. Other businesses include coffee, food service and development of retail outlets as well as regional operations located in Indonesia and Vietnam.

Of the PHP15-billion proceeds (US$346.31 million), PHP11.235 billion (US$259.38 million) would be used for investment in SMPFC's foray into new businesses which include power, water and other utilities, and infrastructure.

SMPFC also intends to use around PHP3.61 billion (US$83.33 million) of the net proceeds to repay a payable to San Miguel relating to the brands acquisition and the Vietnam. The remaining proceeds will be used for general corporate needs.

Pending finalization of a definite investment plan, the company intends to invest in liquid money market instruments.