SMPF president Enrique Gomez Jr. told stockholders during their annual meeting the other day that the company has earmarked P3 billion this year for the expansion and modernization of its plants.
"We have been laying the groundwork for an integrated approach in our market and brand positioning, facilities and operations, and selling and distribution networks," he said. "While both San Miguel and Pure Foods bring their respective strengths into play, the real value lies in the inherent synergies among our businesses."
San Miguel Corp. acquired ownership of Pure Foods from the Ayalas in May last year at a cost of P8 billion. Since then, both companies have been strategically working on an integration process that would bring together the product portfolio of the two companies to practically dominate the local food processing business – from processed and fresh meats, dairy products and flour to feeds and poultry products.
Among the leading products that have established their marks as household names are: Pure Foods’ Tender Juicy Hotdogs and Fiesta Ham, Dari Creme, Star Margarine, Magnolia Chicken, and Monterey Meats. In the animal nutrition sector, the B-Meg and Pure Blend brands are among the market leaders.
Last year, SMPF registered double-digit growth across all its core businesses, leading to a record revenue of P15.8 billion, a 25 percent increase from the prior year. Better selling prices and streamlined processes boosted operating income to P1.6 billion, six percent more than in 2000 despite higher raw material costs.
However, the company’s net income went down slightly to P875 million from P888 million the previous year due to losses from disposed businesses and higher interest expenses brought about by greater borrowings for working capital and new investments.
Almost 38 percent of total revenues and half of operating profits were contributed by Pure Foods Hormel, the company’s processed meat business as brisk demand for hotdogs, bacon, cold cuts and Christmas ham resulted in strong volumes in this segment. — Conrado Diaz Jr.