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San Miguel Brewery eyes beer plant in Vietnam

/ 08:18 AM May 29, 2019

SMC president Ramon S. Ang PHOTO FROM SANMIGUEL.COM.PH

Beer giant San Miguel Brewery plans to expand its footprint in Vietnam by building a brand-new beer brewery with an annual production capacity of at least two million hectoliters in Ho Chi Minh, this country’s most populous city.

SMB is also laying the groundwork for the long-planned construction of a new brewery in the US, top officials said in a press briefing after the company’s stockholders meeting on Tuesday.

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To date, SMB has a very small capacity in Vietnam at around 200,000 hectoliters per year in a plant located quite far from Ho Chi Minh or Saigon, where bulk of the demand comes from, SMB president Roberto Huang said.

The group will start building a new plant in Ho Chi Minh as soon as market studies show good prospects, said SMB chair and San Miguel Corp. president Ramon S. Ang.

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Ang estimated that a two-hectoliter plant may cost around $70 million to build but noted that the group already had a vast site in this area – equivalent to around 200 hectares – where the group’s piggery and feed mills were operating.

Because of SMB’s relatively small capacity in Vietnam, Huang said the group had considered buying other breweries in the past, but no deal had been finalized.  If there’s an opportunity to buy an existing plant, Huang said the group would also be open to this.

To date, SMB’s overseas business accounted for less than 10 percent of total business as its concentration was still mostly in the Philippines, Huang said.

Apart from Vietnam, SMB also has existing operations in Malaysia, Thailand, mainland China, Hong Kong, Vietnam and Indonesia.

On the plan to build a $100-million brewery in the US, Huang said SMB had sent a technical team consisting of an engineer and a brew master to confirm the feasibility of setting up a production hub in the US.

Apart from knowing the potential capacity, Huang said SMB would have to ascertain whether the community where its brewery would rise would get consent from the community to build.

While there’s an agreement in principle to purchase the land where the potential brewery will rise, Huang said SMB would proceed only if there’s no objection from the surrounding community.

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In the Philippines, SMB seeks to address higher demand by working to boost the capacity in its existing breweries.

“By the end of this year, we will inaugurate our sixth brewery, located in Tagoloan, Misamis Oriental. By next year, the conversion of our Santa Rosa Bottling Plant in Laguna into a full-fledged brewery, will also be complete,” Huang said in a report to stockholders.

SMB is also bringing to the market its newest offerings this year – San Miguel Flavored Beer Lychee and Anker Lychee – which the company expects to be well-received by consumers.

“We are also seeing an uptrend in beer consumption both in our domestic and international markets. Along with expanding our capacities, we will increase availability and visibility of our brands in all trade channels, while pursuing cost improvements and operational efficiencies,” Huang said.

SMB’s consolidated revenues hit an all-time high of P129.2 billion last year, 14 percent higher than the previous year.  Net profit for 2018 amounted to P23.84 billion compared to P20.71 billion in the previous year. (Editor: Cenon B. Bibe Jr.)

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TAGS: beer, Business, SMB, Vietnam
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