San Miguel Corporation

Company Overview:
Industry: Food and beverage, Packaging, Real state, Fuel and oil, Power generation,
Infrastructure, and Banking
Founded: Manila, Philippines (September 29, 1890; 130 years ago)
Headquarters: 40 San Miguel Avenue, Mandaluyong City, Metro Manila, Philippines
Number of locations: Over 100 major facilities throughout the Asia-Pacific region.
Area served: Asia-Pacific region.
Key people:
 Eduardo Cojuangco Jr. (Chairman and CEO) (1998–2020)
 Ramon S. Ang (Vice-Chairman, President and COO)
 Ferdinand K. Constantino (CFO)
Products: Diversified
Revenue: ₱1 trillion (FY 2020)
Net Income: ₱48.6 billion (FY 2020)
Total Assets: ₱1.8 trillion (FY 2020)
Number of employees: 17,151
Subsidiaries:
 San Miguel Food and Beverage, Inc.
 San Miguel Yamamura
 Packaging Corporation
 San Miguel Properties
 Petron Corporation
Website: www.sanmiguel.com.ph

History:
Established
In 1889, a well-known Manila businessman, Enrique María Barretto de Ycaza y Esteban, applied for a
royal grant from Spain to establish a brewery in the Philippines. He was awarded the grant for a period
of twenty years. On September 29, 1890 (Michaelmas, or the feast day of Saint Michael the Archangel),
La Fábrica de Cerveza San Miguel was declared open for business. Located at 6 Calzada de Malacañang
(later called Calle Avilés), the brewery took its name from arrabal (suburb or district), San Miguel,
Manila. With 70 employees, the plant produced 3,600 hectolitres (about 47,000 cases) of lager beer
during the first year and subsequently produced other types of beer, notably Cerveza Negra, Eagle Extra
Stout and Doble Bock.

History of expansion
By 1913, imported beer represented only 12% of the total consumption in the Philippines; San Miguel
held an 88% share of the industry. By 1914, San Miguel began to export, with its products finding ready
markets in Hong Kong, Shanghai and Guam.

The company opened in 1922 the Royal Soft Drinks Plant in Manila producing Royal Tru-Orange, other
Royal products and aerated water. Five years later, the company secured the rights to bottle and
distribute Coca-Cola in the Philippines.

The company's program of expansion, acquiring majority control of La Tondeña, Inc., the leading
producer of hard liquor in the Philippines, in 1987 and adding beef and pork production (Monterey
Meats) to the company's food operations in 1988.

SMC's beer exports grew by 150 percent from 1985 to 1989 alone, and the brand was soon exported to
24 countries, including all of Asia's key markets as well as the United States, Australia, and the Middle
East.

By 1995, SMC had manufacturing plants in Hong Kong, China, Indonesia, Vietnam, and had licensing
partners in Taiwan, Guam and Nepal. In 1996 SMC purchased full control of its Hong Kong arm, San
Miguel Brewery Hong Kong Ltd.

-By the end of 1998, Cojuangco sold SMC's stake in Coca-Cola Beverages plc (Coca-Cola Amatil's bottler
in Europe), along with SMC's 45% stake in Nestlé Philippines.

In February 2001, SMC re-acquired control of Coca-Cola Bottlers Philippines, Inc. Shortly after, SMC
acquired Pure Foods Corporation, becoming the undisputed market leader in the Philippines’ fast
growing food industry, owning two-thirds of the refrigerated and processed meat market, and over a
third of the poultry and feeds industries.

For the next three years, SMC bought six companies in four neighboring countries. Its first major
acquisition was Australian boutique brewer J. Boag and Son for A$96 million in 2000. To shore up its
war chest, SMC took in Japanese brewer Kirin Brewery Co. Ltd., which acquired a 15-percent stake in
SMC, for $540 million in 2002. SMC continued its international acquisitions, paying $97 million for Thai
Amarit Brewery Ltd. and $35.5 million for food processor TTC (Vietnam) Co. in 2003. In 2004, it bought
51 percent of Berri Ltd., Australia's top juicemaker, for $97.9 million. By 2004, international sales
comprised 13 percent of total revenues from 10 percent the previous year. In 2005, the company made
its biggest overseas acquisition with the takeover of National Foods Ltd., Australia's largest publicly
traded dairy, which it bought for P80.38 billion. That was followed later in the year with its $420-million
purchase of Singapore-based Del Monte Pacific Ltd., the region's largest pineapple canner. San Miguel
merged National Foods' operation with Berri.

In 2006, SMC has sold its 65% stake at Coca-Cola Bottlers Philippines, Inc. to The Coca-Cola Company
(TCCC) for $590 million. In November 2007, SMC sold Boag's to Lion Nathan for A$325 million. The same
month, SMC also sold National Foods to Kirin for ¥294 billion.

In 2010, SMC acquired majority control of Petron Corporation.

In April 2012, SMC bought a 49% minority stake in Philippine Airlines (PAL) Holdings, worth US$500
million, to revitalize PAL and Air Philippines.[8] On September 15, 2014, SMC sold its stake in PAL
holdings for approximately $1.3 billion and relinquished management control back to the group of Lucio
Tan.

SMC has also expanded its oil and energy business with the purchase of Esso Malaysia Berhad (65%),
ExxonMobil Borneo Sdn Bhd (100%) for US$577.3 million.[9]

In October 2012, SMC bought out the 24% of its shares from the government through Coconut Industry
Investment Fund (CIIF) companies by paying CIIF P57.6 billion.

In separate statements on May 30, 2016, Globe Telecom and PLDT will each acquire half of Vega
Telecom from SMC for P69.1 billion. The acquisition entails P52.08 billion for 100% equity interest in
Vega Telecom and the assumption of around P17.02 billion of liabilities.

On November 6, 2017, SMC announced the consolidation of its beverage businesses into San Miguel
Pure Foods Company, Inc. through a $6.6-billion share swap deal. San Miguel Pure Foods Company will
acquire 7.86 billion shares in San Miguel Brewery Inc. and 216.97 million shares in Ginebra San Miguel
Inc. from SMC. After the consolidation, San Miguel Pure Foods Company will be renamed San Miguel
Food and Beverage, Inc.

Why San Miguel Food and Beverage, Inc. had the potential to
become a global company.
Economic Factor
With its holdings and history of global presence it’s a matter of time before San Miguel Food and
Beverage, Inc. reclaim its position in the global market. Having products well known even abroad and
the latest acquisition in fuel and oil industries, and the growing market for infrastructure in the
Philippines means that San Miguel Food and Beverage, Inc. is on the path of becoming one of the most
influential companies emerging from South East Asia.

Overseas experience

San Miguel Food and Beverage, Inc. is a successful international business leader, transcending own
cultural perspective and learning how business is done in different contexts. Having a rich history in
global market and acquisition of foreign brands for expansion is giving the conglomerate an edge over
its competitors.
DEEP SELF-AWARENESS

Even conducting business in Muslim countries San Miguel Food and Beverage, Inc. knows the limit of
their business model and how to appeal to consumers with different cultures and beliefs. With these the
conglomerate learns to adapt to and tolerate the deep-seated beliefs of others.

LIFELONG CURIOSITY

The world is constantly evolving. With an intense curiosity and a desire to learn, San Miguel Food and
Beverage, Inc. won’t be left behind, it would keep up with the ever changing markets. The conglomerate
is known for its diversified portfolio ranging from food to infrastructure with many in between.

GLOBAL STRATEGIC THINKING

In addition to organic growth, San Miguel Food and Beverage, Inc. continue to seek strategic acquisition
and greenfield opportunities, positioning our businesses in a way to best contribute to our country’s
economic growth and industrial development. The conglomerate will develop strategic partnerships
with global industry leaders, including Kirin in the beverages business and Nihon Yamamura Glass in our
packaging business. These partnerships provide marketing and expansion opportunities, and potentially
provide liquidity and opportunities for SMC to divest minority stakes in its businesses as other
opportunities arise.