SMC boosts flour mills

The San Miguel group is investing P3 to P4 billion to double its flour milling capacity, positioning itself for greater market opportunities with the integration of Southeast Asian economies by 2015.

San Miguel Mills Inc. (SMMI), a unit of San Miguel Pure Foods Company Inc., is set to break ground in September for the expansion of its flour milling facility in Batangas as part of a 1,800-metric ton-per-day capacity expansion program. Likewise part of the program is to put up two new milling facilities in other parts of the country.

SMMI’s daily flour milling capacity is currently at 1,660 metric tons, which means the 1,800-MT expansion program will more than double its production capability.

In a text message on Monday, San Miguel Corp. president Ramon S. Ang said this expansion program would cost about P3 to P4 billion.

“Our flour business has been showing consistent growth these past few years. Now we are approaching a capacity level that will trigger a planned expansion program,” Ang said in a press statement.

“This expansion will allow us to meet the growing demands of the domestic and regional flour market. At the same time, this will also do a lot in helping stabilize or drive down local flour prices as well as prices of commodities using flour,” Ang added.

The flour industry has benefited from the sturdy Philippine economy with consumption of flour growing to 17.5 kilograms per capita, Ang said, noting however that per capita consumption in the Philippines was still lagging compared to neighboring Asean (Association of Southeast Asian Nation) countries.

The expansion of SMMI’s existing milling facility in Batangas and the construction of two greenfield facilities in other strategic areas are part of the group’s overall strategy to grow the domestic market and at the same time penetrate the regional flour market.

“In terms of technology, the flour mills we are building will be more advanced than any in the country today. They will be geared toward serving the needs of the future. They will be able to produce many types and grades of flour, including some not currently available locally, to cater to the needs of an increasingly demanding and sophisticated market,” said Ang.

Once operational, the new facilities will be integrated with SMMI’s existing mill and benefit from its recently opened Golden Bay Grain Terminal in Batangas, resulting in lower ocean freight cost of wheat as well as more flexibility in terms of the variety of wheat types to be used.