Campos family eyes majority stake in San Miguel Purefoods

MANILA, Philippines - The Campos family, which owns food conglomerate NutriAsia Group and leading pharmaceutical firm United Laboratories Inc., is eyeing a controlling or significant stake in San Miguel Purefoods Co. (SMPF), which has an estimated enterprise value of $1.8 billion.

In a text message to The STAR, San Miguel president and chief operating officer Ramon S. Ang said the Campos family was one of five or six companies that have expressed interest in acquiring substantial shareholdings in Purefoods.

San Miguel is trimming its stake in its food and packaging units by as much 51 percent to fund its diversification into more profitable industries like power, telecommunications and infrastructure to propel future growth.

Analysts said SMPF, which owns popular brands such as Purefoods, Magnolia and Monterey, would fit well with NutriAsia Group’s strategy of driving growth and establishing a much stronger presence in the food and drink industry.

NutriAsia Group is the market leader in the liquid condiments, specialty sauces and cooking oil market in the Philippines. Its flagship brand, UFC, has an 85 percent market share in the local ketchup and hot chili sauce categories.

Aside from this, NutriAsia Group controls Del Monte Pacific, a leading food company that markets canned goods, fresh produce, and packaged foods in China, India, and the Philippines. It produces canned fruits and vegetables and processed foods such as condiments, pasta, and sauces.

In the Philippines where the group owns the Del Monte brand, it enjoys leading market shares for canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup, and also markets products under its second-tier brand, Today’s.

Jose Campos Jr. is perceived to be an ally of San Miguel owning a substantial stake in the diversifying conglomerate through Top Frontier Investment Holdings Inc. Campos owns 40 percent of Top Frontier, a major shareholder of San Miguel.

Analysts said San Miguel might likely sell its shares in SMPF to the Campos group in order to ensure the continuity of the ongoing business operations and strategic plan of the country’s biggest food firm.

Purefoods holds 40 percent of the local poultry market and 63 percent share of the hotdogs segment. 

The Campos family bought San Miguel’s minority stake in NutriAsia San Miguel Holdings Ltd., which owns 84.5 percent of Del Monte Pacific Ltd, for $150 million.

NutriAsia San Miguel Holdings is a joint-venture company set up by Campos and SMC four years ago to acquire control of Del Monte Pacific.

Purefoods is currently in a joint venture with American meat company Hormel in its canned and processed meats business.

For this year, Purefoods is looking at a 10 percent to 15 percent growth in its net earnings, banking on improved efficiencies and effective cost management.

From January to March this year, Purefoods reported a six-fold increase in net profit to P872 million on revenues of P18.2 billion. Income from operations grew more than two-fold to P1.4 billion.

Purefoods is eyeing P5 billion from the issuance of shares through a private placement to boost its public float and settle payables to its parent firm. 

The firm is issuing to its parent firm San Miguel Corp. and/or third parties of up to 75 million new common shares at a price that has yet to be decided upon by management.