SMC Company Review (FY 2010) Part 1

San Miguel Corporation or SMC is one of the largest and highly diversified conglomerate in the Philippines. The company is leading in the following businesses: beverage (alcoholic and non-alcoholic), food, packaging, power, fuel and oil. SMC has currently implemented diversification strategy through a series of acquisitions and investments in high growth industry sector like power, fuel and oil, infrastructure, mining, telecommunications, property development and other business outside of its traditional businesses.

Business Details:
1. Beverages
*San Miguel Brewery Inc.(SMB) produces the largest selling beer in the Philippines with 5 local breweries and 5 international breweries strategically located in Indonesia, Vietnam, Thailand and China.
*Ginebra San Miguel Inc. (GSMI) is the world's largest gin producer by volume. It has 2 distillers and four bottling plants. Its subsidiaries also produces non-carbonated ready-to-drink tea and and fruit juices.
*San Miguel Foods and Beverage International Limited - produces various type of non-alcoholic beverages.

2. Food
*San Miguel Pure Foods Company Inc. (SMPFC) and its subsidiaries has a wide variety of product lines and is considered great brands. Among them are Magnolia, Pure Foods, Monterey, Star, Dari Creme, B-Meg and Jelly Ace. SMPFC is 99.92% owned by SMC.

3. Packaging
*San Miguel Packaging Group offers total packaging solutions which caters to manufacturers of food, pharmaceutical, chemical, beverages and personal care. Its clients are wide-spread in the Asia-Pacific, Middle East, Africa and USA.

4. Properties
*San Miguel Properties, Inc.(SMPI) is the real estate arm of SMC.

5. Power Generation
*SMC Global is the largest independent power company in the Philippines with a total capacity of 3,165 MW. It runs the following power plant: Sual, Ilijan, San Roque and Limay.

6. Mining
*San Miguel Enegy Corp. owns 3 mining companies who are concession holders of coal deposits in Southern Mindanao.
*SMC also acquired a 10.1% stake in Indophil Resources NL which has interest in exploring, developing and operating the Tampakan Copper-Gold Project in Southern Mindanao.

7. Fuel and Oil
*SMC owns 68.26% of Petron Corp. (PCOR) which is the largest integrated oil refining and marketing company in the Philippines supplying more than 1/3 of the country's refined oil requrement and is the largest LPG distributor.

8. Infrastructure
*San Miguel Holdings Corp. (SMHC) owned 35% of PIDC which holds the concession to build and operate the 88.6 km expressway that will connect Tarlac, Pangasinan and La Union.
*SMHC also owned 93% of TADHC which holds a 25 year contract-add-operate-transfer arrangement for rehabilitating and operating the Caticlan airport.
*SMHC has signed a sale and purchase agreement to acquire up to 51% stake in Universal LRT which holds a build-transfer-operate concession on MRT7 project.

9. Telecommunications
*Vega Telecoms Inc. (Vega), SMC's telecom arm, owns 41.8% of Liberty Telecoms (LTHI), 100% of BellTel and 40% of Eastern Telecoms.

Business Performance:

SMC's consolidated sales revenue in 2010 increased by 41% compared last year mainly due to new business (9% from core business and 38% from new business)

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Note that in 2009, SMC sold some of its asset amounting to P50,630 million mainly from the sale of stake in San Miguel Brewery Inc. (SMB). This makes the 2009 net income looks stellar compared to 2010. However excluding this one-off item, the net income increased to 150%.

Click here for the continuation: SMC Company Review (FY 2010) Part 2

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