SMC group sees sales hitting $20BBy Paolo G. Montecillo
Philippine Daily Inquirer
Cojuangco-led conglomerate San Miguel Corp. expects to book $20 billion (P860 billion) in gross sales revenue across all its businesses this year as a result of its aggressive diversification.
The projected revenue is 14.3 percent higher than the $17.5 billion posted last year. This also represents a sevenfold increase from only $3 billion in annual sales the company had before it started diversifying three years ago.
“We will have $20 billion in gross sales revenues this year. Internally, we have set another target that is even more ambitious,” SMC president and chief operating officer Ramon S. Ang said in a briefing Wednesday.
SMC earlier projected to hit the $20-billion mark by 2015, but Ang said the companies that the conglomerate had acquired performed better than expected.
After decades of growing into one of Asia’s largest food and beverage conglomerates, SMC started investing in assets in the power, telecommunications, infrastructure and banking sectors.
SMC’s most recent acquisition was flag carrier Philippine Airlines (PAL).
The other “crown jewels” in SMC’s portfolio include Petron Corp., the country’s largest oil refiner, and majority stakes in three major tollways south of Metro Manila.
SMC and partner Qatar Telecom control Liberty Telecom Holdings Inc., the company that operates the wi-tribe wireless broadband Internet brand.
Ang said Liberty or any of SMC’s other telecom subsidiaries would soon vie for the third-generation (3G) frequency that the government was planning to put up for bidding this year.
“We will bid to win. If we get that, we can start offering voice and text message services. Then, we can compete with (Philippine Long Distance Telephone Co.) and Globe (Telecom Inc.),” he said.
Liberty posted a P1.6 billion net loss last year.
Officials said the company was expected to start realizing profits by 2014.
SMC’s acquisitions were funded mainly through the sale of substantial stakes in existing food and beverage subsidiaries such as San Miguel Brewery.
Certain quarters viewed SMC’s diversification into riskier businesses negatively. G lobal debt watcher Standard & Poor’s went as far as downgrading the conglomerate’s credit rating, noting that the spreading out of SMC’s resources and management focus would deteriorate the company’s ability to pay obligations.
Ang, however, said the group’s performance so far proved that all the company’s naysayers were wrong.
“When we started diversifying, almost everybody said we would fail. But today, everyone is trying to imitate us,” he said.
He said SMC would continue venturing into new businesses. “We are almost there,” he said, when asked whether SMC was already satisfied with what it had on its plate. “But there are other opportunities outside that we want to pursue,” he said.
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