San Miguel Pure Foods opens Batangas grains terminal

MABINI, Batangas, Philippines -- The food processing arm of diversified conglomerate San Miguel Corp. (SMC) has started operations of its P3-billion grain terminal in Batangas.

The modern facility is expected to deliver $6 million in annual savings that will reduce production costs and improve the profitability of San Miguel Pure Foods Co. Inc. (SMPF), company officials said.

The world-class Golden Bay Grain Terminal (GBGT) is considered the country’s most efficient, fully-automated grain terminal, SMPF said.

“We didn’t have a facility like this. Before, we were using the commercial terminals in Bataan for the soybean meal and feeds but now we have our own to service our needs,” said Florentino Policarpio, president of San Miguel Mills Inc. and GBGT.

He said the grain terminal will result in “significant savings in costs for flour and feed-milling operations.”

The company’s profitability will improve in the near term given the immediate impact of the reduction in production costs, he added.

Specifically, SMPF targets to save $3 to $7 per metric ton (MT) for its soybean meal and wheat imports. With annual imports of 500,000 MT for soybean meal and 400,000 MT for wheat, SMPF stands to save as much as $6.3 million on costs per month.

“The terminal is seen as an important investment for the company as it will maximize synergies within the San Miguel Group as well as external partners,” Policarpio said.

Rita Imelda Palabyab, president of SMPF subsidiary San Miguel Foods, said GBGT will be the receiving and distribution hub of SMPF, which has more than 30 feed mills nationwide.

GBGT’s dock boasts of a berth that can accommodate a Panamax vessel of about 300 meters with as much as 80,000 dead weight tonnage.

The facility has a total 150,000-MT capacity for assorted grains housed in eight silos with a combined capacity of 50,000 MT. It also has a pair of flat storage warehouses with a total 100,000 MT of grain each.

Last month, a Supramax cargo vessel Persus Ocean was the first to officially dock in the terminal, delivering an estimated 50,000 MT of wheat-in-bulk from Portland, Oregon.

Policarpio said the company is looking to recoup its investment in seven years, with SMPF willing to open the terminal for use of other companies like international grain traders.

SMPF, for its part, will be the major user of the facility through subsidiaries San Miguel Foods and San Miguel Mills.

“Fortunately for us, we have a huge internal use because our feeds and flour is a market leader,” Policarpio said.

GBGT can still expand its storage capacity with the provision for four more silos.

SMPF is into the production of poultry and livestock feeds (B-Meg); flour (San Miguel Mills); and canned goods and processed meat (The Purefoods-Hormel Co. Inc.). It also holds several food brands like Magnolia, PureFoods and Monterey.

In the nine months to September this year, its net income fell six percent to P2.74 billion from P2.29 billion but net sales inched up three percent to P71.41 billion from P69.35 billion a year ago.