"The company has been operating like a mini-Department of Agriculture and with regard to its exports a mini-Department of Trade and Industry."
Anyone who has no idea at all, or has only a faint idea, of what a massive corporate expansion looks like, should read any of the media reports of the recent statement made by president and chief operating officer Ramon S. Ang to the stockholders of this country’s No.1 manufacturing establishment, San Miguel Corporation (SMC). SMC’s expansion program for the period up to 2020 is nothing short of awesome.
The program covers SMC’s core business—food products and beer—and the packaging for those products. The price tag for 18 facilities is P742 billion. Easily this is the largest expansion (of capacity) we’ve undertaken in our company,” Mr. Ang told his company’s stockholders.
The biggest part of the expansion program relates to SMC’s beer business, which was placed under a new corporate entity called SMB (San Miguel Brewery Inc.). SMB’s expansion consists of (1) installation in Northern Mindanao—Misamis Oriental, specifically—of a brewery with an initial capacity of 1 million hectoliters, (2) construction in different parts of the nation of up to six more breweries, and (3) an increase in the capacity of its Santa Rosa City bottling plant.
The expansion on the food-products side of SMC’s business consists of the building of additional poultry processing plants, processed meat facilities, dairy products plants, ready-to-eat products, flour mills and feed mills. Inaugurated recently was the General Trias City facility that doubled SMC’s hotdog manufacturing capacity. One of its food-production subsidiaries, San Miguel Pure Foods, has entered into a licensing agreement with the US’s George Hormel Co. under which SMC will produce Spam meatloaf for the domestic market and for export to Southeast Asian countries. And it has completed the construction of two additional feed mills—one in Bataan and one in Bulacan.
Expansion of container capacity must go hand in hand with expansion of production capacity. Accordingly, SMC is expanding the capacities of its bottling and packaging facilities. As already stated, it is increasing the capacity of its Sta. Rosa City bottling plant. And it has acquired the Australian bottling companies—Portavin Holdings Pty. Ltd., Barossa Bottling Services Pty. Ltd. and Best Bottlers Pty. Ltd.—to support the expansion of its operations in the Western Pacific area.
In his statement to SMC’s stockholders, Mr. Ang said that through the diversification program of the last ten years – into infrastructure, power generation and oil refinery and marketing, among other business fields – SMC never lost sight of its core businesses as growth engines. “Over the years we’ve worked to continuously strengthen not only our leadership in the markets we’re in but also our capability to meet the changing needs of our growing consumer base,” said Mr. Ang.
In undertaking its largest-ever expansion program—building poultry and meat processing plants, dairy plants, flour mills and feed mills to produce food products for the domestic market and for export—SMC has been operating like a mini-Department of Agriculture and with regard to its exports a mini-Department of Trade and Industry. I’m inclined to think that this country would be far better off if its agriculture and food sector—farm production, food prices and rural employment—were operated by entities like SMC and the Department of Agriculture and the National Food Authority were headed by men like Ramon S. Ang.
