SMC-Purefoods allots P2-B for new plant

San Miguel Purefoods Corp. (SMPC) is allotting P2 billion this year for the construction of a new meat processing plant and the expansion of its flour milling facilities, company officials said.

At the same time, SMPC said it is looking into business opportunities in processed meats and other branded foods in Asia Pacific in line with its regional expansion.

Its parent firm San Miguel Corp. earlier said it is targeting to expand operations in seven Asian countries, namely China, Indonesia, Vietnam, Thailand, Malaysia, Taiwan and Australia.

SMPC already has a local venture with Taiwan’s Great Wall Group for the manufacture of young animal ration, through Philippine Nutrition Technologies. It is also in the processed meat manufacturing business in Indonesia through PT Purefoods Subah Indah, a joint venture with the Hero Group.

San Miguel Corp. chairman and chief executive officer Eduardo Cojuangco said SMPC is planning to increase its share of branded value-added foods through extensive product development to meet the needs of both the retail and food service sectors.

"We are taking a closer look at our Monterey Meat Shops. We’d like to go beyond pork and beef, Cojuangco said, adding that poultry, Purefoods-Hormel’s refrigerated and canned meats, and even San Miguel’s beverages should be able to ride on the company’s over 250 Monterey Meat Shops.

To improve market position and further increase profitability and shareholder value in the long-term, SMPC is developing strategically-located Integrated Agro-Industrial Zones (IAIZ) composed of plantations for raw materials such as corn and cassava; poultry and hog farms; and processing and distribution facilities.

"These integrated zones will help us make our poultry and meats business as efficient and cost-effective as possible," Cojuangco said.

Cojuangco added the company has already identified potential IAIZ sites and is benchmarking controlled climate facilities to promote the optimum productivity and growth of poultry and hogs.

"These zones are also near San Miguel’s beer, beverages and flour facilities, allowing us to readily utilize the by-products of their processes in our animal feeds. By doing so, we reduce the cost of our animal feeds as raw materials account for 70 percent of the total feed manufacturing cost," Cojuangco said.

For the first quarter this year, Purefoods incurred a net loss of P77 million, a reversal from the P103 million profit reported in the same period in 2002 as the company said it was affected by the oversupply of poultry products.