PureFoods seeks to expand footprint in Asia
San Miguel PureFoods Co. Inc. is seeking to expand its regional operations through a potential acquisition in Indonesia, Southeast Asia’s largest economy.
On the sidelines of the company’s stockholders’ meeting on Friday, PureFoods president Francisco Alejo III told reporters that the food unit of conglomerate San Miguel Corp. was also looking at potential expansion in Vietnam and new markets like Myanmar and Cambodia.
“I think there’s an opportunity, especially with an Asean community,” Alejo said.
PureFoods is particularly keen on expanding in Indonesia where it has existing operations through subsidiary P.T. San Miguel PureFoods Indonesia.
“We are very optimistic about Indonesia because we’re already there. It has a good economy. (There are 250 million) Indonesians, so our business there is doing well,” Alejo said.
In Vietnam, he said the company would like to grow its existing operations but noted that it was still “problematic.”
By 2015, the 10-member Association of Southeast Asian Nation (Asean) community has committed to pursue a regional economic integration through Asean Economic Community (AEC). The vision is to create a single market and production base and turn the region into a highly competitive economic block with equitable economic development and is fully integrated into the global economy.
In the local market, PureFoods’ plan is to grow market share and boost volume by double-digits across all segments. The company is a leading player in hotdogs (with a market share of more than 50 percent), poultry (40 percent), feeds (40 percent) and flour (17-19 percent).
“In most markets that we complete in, we’re either number one or two in thee segments,” he said.
On Friday, SMC president and PureFoods vice chair Ramon S. Ang also said the group was studying the potential acquisition of six brand-new mid-sized Panamax cargo vessels worth around $50 million each to meet the large shipping requirements of PureFoods.
Through unit San Miguel Shipping and Lighterage, the group is studying the potential acquisition of Panamax vessels, each with a payload capacity of 60,000 to 85,000 tons to transport PureFoods’ commodity requirements coming from the US like wheat and soya.
At PureFoods’ annual consumption of about two million tons of wheat and soya imports, Ang said having its own cargo fleet would mean about $10 million a year in savings.
If and when the group buys vessels to transport commodity requirements, he said the cost of around $50 million per unit could be covered by long-term financing.
