SMC transfers last non-liquor business to its food group

San Miguel Corp.(SMC) subsidiary La Tondeña Distillers Inc. (LTDI) has transferred its last remaining non-liquor business, Sugarland Corp., to a sister unit under the San Miguel Food Group, a company official disclosed to the Philippine Stock Exchange.

LTDI corporate information officer Ferdinand Constantino said the company has signed last week a sale and purchase agreement with Magnolia Inc., an operating unit of San Miguel Pure Foods Co., for the sale of LTDI’s shares in Sugarland Corp.

Sugarland Corp. spun off from Sugarland Beverage Corp (SBC)., a joint venture between LTDI and SMC with an ownership structure of 51 percent and 49 percent, respectively. SBC, in turn, was acquired from Sugarland Multi-Fod Corp. in May 2000 for P2.9 billion, and merged as an operating unit of LTDI to boost its non-liquor line then consisting of market leaders in the juice and jelly snacks and bottled water products.

In line with SMC’s groupwide integration and restructuring starting in 2001 with the acquisitions of three major businesses – Coca Cola Botters Philippines Inc.(CCBPI), Cosmos Botlling Corp. and Pure Foods Corp. – LTDI merged its acquired units SBC, Metro Bottled Water Corp. amd SMC Juice Inc. into a single entity and divested them for $141 million (P7.334 billion) to fold into the Coca-Cola-led group.

Although LTDI’s water and juice segments contribute 27 percent to total revenues, the company remains firmly anchored on its hard liquor line which is its solid growth driver making up 73 percent of total sales.

LTDI’s wines and spirit line boasts of the flagship Ginebra San Miguel, Anejo Rum, Vino Kulafu, Tondeña Manila Rum, Oxford London Dry Gin, San Miguel Bravo Rum and Cordial Lime Juice.

The transfer of Sugarland, which leads the fast-growing ready-to-eat jelly snacks and dessert segment, completes the last phase of LTDI’s restructuring into a fully liquor-based company, although it gave up some of the biggest name brands such as the Magnolia brands of fruit drinks, Zip Juice Drink, Eight O‚Clock, Ponkana, Ice Cold Mixers and the bottled water brands Viva!, FIRST and Wilkins.

Magnolia Inc., in turn, will absorb the Jelly Ace brand of jelly snacks to expand its dairy, oils and fats products led by the butter, margarine and cheese products. – Conrado Diaz Jr.