SMC sets next wave of diversification

Conglomerate San Miguel Corp. (SMC) is mapping out its next wave of diversification that seeks to add next-generation technology businesses—such as micro-chips, smartphones and electric cars production—to its portfolio.

After the stockholders meeting of Top Frontier Holdings yesterday, SMC president Ramon S. Ang said SMC was heading to a new phase of diversification, nine years after building and acquiring new ventures outside of its traditional food and beverage business.

In less than a decade, the second phase of SMC’s diversification transformed the conglomerate into a leading power generation and infrastructure firm.

“The next phase is to go to next-generation electronics manufacturing,” Ang said.

These may include chips, plug-in or battery-operated vehicles and consumer electronics like smartphones, he said.

SMC’s aspiration is to build the Philippine version of South Korea’s largest chaebol, Samsung, a leading global producer of home electronics with cutting-edge technology including smartphones, tablets, TVs, home appliances and other products.

“This is what we are studying because that’s the future,” Ang said.

E-commerce may also be part of SMC’s next wave of diversification, Ang said, noting that online business was gaining traction globally.

The next phase of SMC’s diversification is something that enjoys high margins and robust demand globally, Ang said.

To date, he said Samsung has been exporting $40-billion worth of products from its manufacturing hub in Vietnam. Ang said that if SMC could get into this new wave of business, it would add a new leg of growth to the conglomerate.

The new businesses that would emerge in the future would all be based on clean technology—such as tidal power, hydropower, clean technology and high-tech chips, he said.

SMC was founded in 1890 as a single brewery in the Philippines. It has since expanded to regional markets and entered non-traditional businesses like fuel and oil, energy, infrastructure, telecommunications, mining, banking, cement and airline industries. It later divested its interest in telecommunication and airline.