SMC creates two units for beer business

Southeast Asia’s largest food and beverage conglomerate San Miguel Corp. has set up two new wholly-owned subsidiaries for its interests in the beer and beer brand business.

The new companies — Brewery Properties Inc. and Iconic Beverages Inc. – have filed their incorporation papers with the Securities and Exchange Commission.

No other details were disclosed by the company.

San Miguel Brewery Inc., its local flagship, offers popular brands such as Super Dry, Cerveza Negra, San Mig Strong Ice, Gold Eagle and Cali (the country’s only malt-based non-alcoholic drink). 

San Miguel’s beer brands San Miguel Pale Pilsen, Red Horse, San Mig Light and Gold Eagle are among the top four brands in the country.

In the nine months ending September this year, San Miguel Brewery reported a 22.8 percent jump in net profit to P7 billion on the back of a six percent growth in sales volume. Sales revenues rose 10 percent to P35.2 billion while operating income increased 22.5 percent to P10.8 billion on strong beer consumption and intensified marketing activities.

During the third quarter, San Miguel Brewery launched San Miguel Premium All-Malt Beer, a full-flavored beer with a smooth balanced bitterness. Plans are underway to expand the reach of this product outside Metro Manila given strong consumer acceptance.

San Miguel Brewery, which contributes around 40 percent of group operating profit, is undertaking new programs to offer wider availability and ensure consumer satisfaction. To conserve financial resources, programs to reduce inventory and trade receivable levels were also implemented alongside other cost-saving programs.

It raised P6.16 billion (roughly $147 million) from an initial public offering of 770.524 million shares or five percent of the company. Of the total proceeds, P1.85 billion went directly to San Miguel Brewery which will be used to further strengthen its brand portfolio, expand its coverage and improve facilities and equipment.

San Miguel Brewery, in which Japan’s Kirin Holdings Co. Ltd. holds a 20 percent stake, has budgeted P700 million for its capital expenditures this year.