Detailed History of San Miguel Corporation and Its

Operation Abroad

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. The facility had two sections: one devoted to the production
of ice with a daily capacity of 5 tons, and the other to beer production. The brewery was the
first in Southeast Asia using the most modern equipment and facilities of the day. 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.
June 6, 1893 - the company was incorporated and registered with a capital of P180,000. Those
forming the corporation were Barretto, Pedro Pablo Róxas y Castro, Gonzalo Tuasón y Patiño,
Vicente D. Fernández y Castro, Albino Goyenechea, Benito Legarda y Tuáson and the heirs of
Don Mariano Buenaventura y Chuidan.
Pedro Pablo Róxas was soon appointed manager, playing a prominent role in the development
of the firm. He was the active member of the firm until 1896, when he left for Europe. Prior to
his departure, he acquired Barretto's shares in the company worth P42,000.
May 1896- After Barretto retired , Róxas acquired the rest of Barretto's stake in the business.
1895 - San Miguel Beer won the first of its many awards as a product of the highest quality at
the Exposición Regional de Filipinas. By 1896, San Miguel Beer was outselling by more than five-
to-one all imported beers in the country.
1900s - ushered in a period of prosperity after the Philippine Revolution and the beginning of
the American Occupation. Demand for beer increased, and for San Miguel, still under Róxas'
leadership, modernization of their operations included installation of electric conveyors and
automatic machines, with the brewery's equipment modernised by 1910
1913 -  imported beer represented only 12% of the total consumption in the Philippines; San
Miguel held an 88% share of the industry. Róxas died in Paris, France in 1913. Soon after, Benito
Legarda and Gonzalo Tuasón made it advisable to change the form of the company from a firm
of co-participants to a corporation (San Miguel Brewery, Inc.). Róxas's son, Antonio Róxas y de
Ayala, was appointed president, with Enrique Brías y de Coya and Don Ramón J. Fernández as
managers.
1914 - San Miguel began to export, with its products finding ready markets in Hong Kong,
Shanghai and Guam. When the First World War broke out, exports came to a temporary halt
due to difficulties such as shortage of raw materials and the consequent rise in manufacturing
costs. It was not until Prohibition was repealed in the United States that San Miguel was able to
resume exports to Guam and later to Honolulu, Territory of Hawaii. By the end of 1914, Enrique
Brías, after seeing that his efforts and industry had resulted in a progressive and prosperous
business, retired from active business life in favour of his son, Antonio Brías y Róxas. In 1918,
Antonio Róxas resigned from his position as president.
Andrés Soriano Sr.: 1918–1964
Andrés Soriano (a grandson of Don Pedro Pablo Róxas and a nephew of Don Antonio Róxas)
joined San Miguel as a clerk in the accounting department. In 1918, after the resignation of
Antonio Róxas, Ramón J. Fernández assumed the presidency and Soriano was made acting
manager. In 1923, Soriano was appointed manager and managed San Miguel together with
Antonio Brías y Roxas with constantly increasing success.
1922 - The company opened in 1922 the Royal Soft Drinks Plant in Manila producing Royal Tru-
Orange, other Royal products and aerated water. (In 1919, the company acquired the Oriental
Brewery and Ice Company and transformed the building into an ice plant and cold storage; later
the Royal Soft Drinks Plant.) Five years later, the company secured the rights to bottle and
distribute Coca-Cola in the Philippines.
1925 - San Miguel went into the ice cream business with the purchase of the Magnolia Plant
on Calle Avilés which was transferred a year later to a new site on Calle Echague (now, C.
Palanca Sr. Street) in Quiapo District, Manila. The new site used to house the Fábrica de Hielo
de Manila which was bought by San Miguel in 1924. To achieve greater self-sufficiency in its
operations, the firm opened a new plant in 1930 to produce carbon dioxide for its soft drinks
products and dry ice for the refrigeration needs of its ice cream products.
1932 - a plant was set up to produce compressed yeast for bakeries and medical use. The
following year, the company leased from the government the site for Insular Ice and Cold
Storage for a period of ten years.
1930s- San Miguel began investing in businesses overseas. The company set up a short lived
dairy business in Calcutta, India and Singapore (Cold Storage Creameries, Singapore), and
invested in breweries in the United States (a stake in the George Muehlebach Brewing
Company and majority holdings in the Lone Star Brewing Company located in San Antonio,
Texas).
 World War II - Before World War II broke out, San Miguel built a glass factory in Paco and
the Cebu Royal plant, its first installation outside Luzon. When the war reached the Philippines,
Soriano was commissioned as a colonel and served as an aide to General Douglas MacArthur.
One of the first Filipino brewmasters was Dominador San Diego Santos, a chemist
from Obando, Bulacan.
After the war, San Miguel rebuilt and mounted a large scale expansion program. The company
acquired and modernized a second brewery in Polo, Bulacán (now part of Valenzuela City) in
1947. Two years later, five other plants were opened: the Manila glass plant in Farola, a carbon
dioxide plant in Otis, a carton plant, the Iloílo Coca-Cola plant and the Farola power plant.
Exports of San Miguel Pale Pilsen resumed. New soft drink plants followed in Davao and Naga.
Andrés Soriano Jr.: 1964–1984
1964- the company's name was changed to San Miguel Corporation (SMC) and moved to a
new head office along Ayala Avenue in Makati.
Andrés Soriano died on December 30, 1964. At the time of his death, Soriano had parlayed his
family's vast San Miguel fortune into mining, dairies, factories, a newspaper and a radio station.
He had investments in Philippine Airlines, held the largest Coca-Cola franchise, and owned
five insurance agency distributorships, a Kansas City brewery that made Lone Star and Colt
45, gold mines in British East Africa and a development company in Spain.
Following Soriano's death, Antonio Róxas y Gargollo was elected chairman and Andrés Soriano
Jr. became president. Soriano Jr. would become chairman in 1967 and was credited with
instituting modern management, including decentralization along product lines.
1970s -  Philippine President, Ferdinand Marcos imposed a tax on the production of coconuts, a
major Philippine cash crop, with the proceeds supposed to fund that industry's development. It
was alleged, however, that the money was funneled into United Coconut Planters Bank,
controlled by Eduardo Cojuangco Jr., which Cojuangco then used much of the funds to help him
purchase his controlling stake in San Miguel in 1983. The controlling interest carried nine of
SMC's 15 directors seats with it.
Eduardo Cojuangco Jr.: 1983–1986
1983 - Enrique J. Zóbel (a third cousin of Soriano), president of Ayala Corporation and vice
chairman of the SMC board, instigated a takeover of SMC. The seeds of the "family feud" lay in
the refusal of the Soriano management to share corporate information with Zóbel, particularly
regarding contracts that SMC management was entering into with ANSCOR, a Soriano company.
Soriano viewed his third cousin Zóbel as a rival, while Zóbel (holding nearly 20% of SMC stake)
viewed Soriano (with about 7%) as mismanaging the company and engaging in sweetheart
deals. Unable to oust Soriano, Zóbel sold his group's 19.5% stake to businessman Eduardo
Cojuangco Jr., an associate of then President Ferdinand Marcos. Cojuangco's Coconut Industry
Investment Fund (a.k.a., United Coconut Planters Bank) accumulated an additional 31% of SMC,
giving him effective control of SMC and leaving the Soriano family with a mere 3%. Funds used
by Cojuangco to acquire Zóbel's stake came from levies imposed by the Marcos dictatorship on
coconut farmers. The Supreme Court has declared such levies to be public funds and therefore
any assets bought using these funds are owned by coconut farmers.
1984 - Cojuangco became the chairman. That same year, SMC moved to its new head office
in Mandaluyong. Cojuangco brought coconut oil milling and refining operations into SMC's
portfolio. His reign, however, was cut short when Marcos was toppled in 1986.
People Power Revolution in 1986 -  Corazón Aquino, Cojuangco's estranged cousin, became
president of the Philippines. Aquino rode on the crest of widespread public outrage over the
assassination of her husband, Benigno Aquino Jr., in 1983. One of the people blamed for her
husband's death was Cojuangco, who fled on the same aircraft as Marcos to Hawaii in 1986.
The Aquino administration sequestered Cojuangco's stake in SMC and agreed to let Andrés
Soriano III, son of the late Soriano, run the company in spite of the Soriano family's holdings in
San Miguel being a mere 1%.
Soriano embarked on an ambitious internationalization program, hoping to expand into other
countries and mitigate the effects of the Philippines' unstable economy. He also wanted to
head off encroaching competition from the world's biggest breweries, namely Anheuser-
Busch and Miller of the United States, Kirin of Japan, and BSN of France.
1998 - Andrés Soriano III resigned in July 1998 and Eduardo M. Cojuangco Jr. was elected
chairman of San Miguel Corporation. Francisco C. Eizmendi Jr. stayed as president and Ramón S.
Ang was elected vice-chairman in January 1999. Ang was appointed president and chief
operating officer following the retirement of Eizmendi in 2002.
Having installed a critical mass of brewing capacity in China, Indonesia and Vietnam, the new
management decided to continue the company's investments in these areas, aggressively
focusing on brand and volume building initiatives, most especially in China. SMC revamped the
selling and distribution organization resulting in higher distribution efficiency, improved
coverage of key accounts, greater pricing stability and reduced overall costs. In China, the
company chose to focus on growth markets while still reaching close to 30 cities. Where in the
past, it had primarily concentrated on the premium market it then aggressively pushed its
medium and low-end brands.
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.
San Miguel Brewing International (SMBIL) regional headquarters was transferred from Hong
Kong to Manila and to reduce overhead expenses, the employees of SMBIL were repatriated.
The group-wide logistics and purchasing functions were realigned at the corporate level. The
food, liquor and international operations were recapitalized. Metro Bottled Water Corporation,
manufacturers of Wilkins Distilled Water, was acquired. 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.
MC 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.
2010 - SMC acquired majority control of Petron Corporation.
2012, SMC bought a 49% minority stake in Philippine Airlines (PAL) Holdings, worth US$500
million, to revitalize PAL and Air Philippines
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%) and ExxonMobil Malaysia Sdn Bhd (100%) for
US$577.3 million.

From the original cerveza that first rolled off the bottling line, San Miguel Corporation
has since
expanded its portfolio to produce a wide range of popular beverage, food and packaging
products which
have–for over a century–catered to generations of consumers’ ever changing tastes. It has also
diversified into heavy industries including power and other utilities, mining, energy, tollways
and
airports.

The Company’s manufacturing operations extend beyond the Philippines to Hong Kong,
China,
Indonesia, Vietnam, Thailand and Malaysia. Its products are exported to major markets around
the
world. Continuing a tradition of product quality, San Miguel is capitalizing on its unique
strengths in
brands and distribution to weave its products more deeply into the fabric of everyday life. Not
just in the
Philippines but in the Asia-Pacific region.
San Miguel’s partnerships with major international companies have given the Company
access to the latest technologies and skills. Our marketplace experience, technical expertise,
and innovation
capabilities, while largely homegrown, also reflect our long term partnerships with world class
players.
San Miguel’s joint venture partners include Hormel Foods Corporation, Yamamura Glass
and Fuso Machine and Mold Manufacturing of Japan. A strategic equity investment in San
Miguel by Japan’s
leading brewer and global player, Kirin Brewery Company, Ltd. has further enhanced San
Miguel’s
competitive position in Asia, a region in which it is already well placed.