Philippines: San Miguel sees strong growth in 2006

Leveraging on the continuing strong performance of its largest core businesses and the growth potential of its Australian acquisition, National Foods, San Miguel Corporation is looking toward more robust growth rates for 2006, the company announced on March 16, 2006.

“Our beer and food businesses grew in 2005 as a result of effective brand building and strong innovation, well above the rest of our portfolio and we are looking to these businesses to increase our growth rate, allowing us to generate internal sources of funding for future business opportunities,” said Ramon S. Ang, president and chief operating officer of San Miguel Corporation.

Added Ang, “These businesses were able to maintain their margins despite significant inflationary factors. Up-front cost initiatives, improved price and product mix and stepped-up sales execution allowed us to finish the year with a strong top line.”

Ang also cited the combined (with Berri, Ltd.) National Foods as another source of organic revenue generation. San Miguel Corporation’s Australian subsidiary, National Foods Ltd., contributed revenues of AS$1.2 billion for 2005, an estimated 21% of San Miguel's total revenue for the year.

Contributions from the National Foods dairy business were for the period 10 June to 31 December 2005, while contributions from the former Berri, Limited juice business were for the entire January to December period.

San Miguel purchased Berri in August 2004 and it was consolidated starting November of that year, while National Foods was consolidated in June 2005 after San Miguel completed the 100% acquisition of National Foods shares.

“National Foods has proven to be an outstanding acquisition in a number of ways. It has helped push revenue and it has given us access to a market that has tremendous potential. I can’t think of any other business that could have given us such huge gains in such a short period of time.”
Given San Miguel’s plans for innovation and brand building in 2006, Ang expects better growth for the full year.

“The increases in excise tax and in packaging costs associated with new products are now behind us and we’re confident that we can improve the profitability of all our businesses.”

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