Profiling: San Miguel Corporation (PSE: SMC)

San Miguel Corporation (SMC, the Company) has the following corporate structure:


SMC is engaged in the following industries:

  1. Beverages through San Miguel Brewery Inc. (SMB), Ginebra San Miguel, Inc. (GSMI), and San Miguel Foods and Beverage International Limited (SMFBIL)
  2. Food through San Miguel Pure Foods Company, Inc. (SMPFC) (owns Golden Bay Grain terminal)
  3. Packaging through San Miguel Yamamura Packaging Corporation (SMYPC), San Miguel Yamamura Packaging International Limited (SMYPIL), Mindanao Corrugated Fibreboard, Inc. (MCF), San Miguel Yamamura Asia Corporation (SMYAC)
  4. Real Estate through San Miguel Properties, Inc. (SMPI)
  5. Power Generation and Distribution through SMC Global Power Holdings Corporation (SMC Global)
  6. Mining through Clariden Holdings, Inc, (Clariden)
  7. Fuel and Oil through SEA Refinery Corporation (SRC)
  8. Infrastructure though San Miguel Holdings Corp. (SMHC)
  9. Telecommunications through Vega Telecom, Inc. (Vega) and Eastern Telecommunications Philippines (ETPI)

Major contributor to SMC’s income is the Beverage, Food, Packaging, Power Generation and Distribution, and Fuel and oil businesses.

SMC’s beverage business is mainly driven by San Miguel Brewery Inc. (SMB). SMB claims to have a market share of more than 90% in the Philippines and exports its beer products to over 40 countries. SMB’s domestic operations only grew by 5% in 2012 while international operations only rose 6%. SMB launched in December 2012 a new product to cater the health conscious market segment with zero-carb, low calorie San Mig Zero.

Ginebra San Miguel, Inc. (GSMI) has trimmed down its losses down to P566 million in 2012 from P900 million and San Miguel Foods and Beverage International Limited (SMFBIL)’s subsidiary, PT San Miguel Indonesia Foods and Beverages, sold its land use rights, building and machinery for $27 million on September 28, 2012 recognizing a gain of P45 million.

SMC’s food business is under San Miguel Pure Foods Company, Inc. (SMPFC) with recognizable brands such as Magnolia, Purefoods, Tender Juicy, Monterey, Star, Dari Crème, B-Meg, San Mig Cofee and JellYace.

Below are SMPFC’s corporate structure:


San Miguel Foods, Inc. operates the Feeds, Poultry and Fresh Meats, Franchising (Smokey’s hotdog and Hungry Juan roast barbeque outlets), food services business through Great Food Solutions.

San Miguel Mills, Inc. (SMMI) engages in the manufacture and distribution of flour and premixes. In September 2011, SMMI formed Golden Bay Grain Terminal Corporation (GBGTC) for the construction of a grain terminal in Mabini, Batangas where SMMI plans to invest P2.5 billion with the intention to minimize freight costs for the flour and feeds milling operations.[1] Total costs incurred as of December 31, 2012 for the grain terminal is 1,071.2 million.[2] GBGTC is not yet in commercial operations.

The Purefoods-Hormel Company, Inc., a 60-40 joint venture between the Company and Hormel Netherlands B.V., produces refrigerated processed meats (i.e. hotdogs, bacon, ham, and nuggets) and canned meat products (i.e. corned beef, luncheon meat, sausages, spreads and ready-to-eat viands.) Magnolia, Inc. a wholly owned subsidiary, manufactures and market butter, margarine,  cheese, jelly snacks, and ice cream. PT San Miguel Pure Foods Indonesia, a 75% owned subsidiary engaged in the manufacture and distribution of processed meats in Indonesia. San Miguel Super Coffeemix Co., Inc., a 70-30 joint venture between the Company and Super Coffee Corporation Pte Ltd. (SCCPL) (30% interest was initially owned by Super Cofgeemix Manufacturing Ltd. of Singapore), started commercial operations in April 2005 by marketing its 3-in-1 coffee mixes in the Philippines. San Miguel Pure Foods International, Limited, a wholly owned subsidiary, has a 51% effective interest in San Miguel Hormel Co., Ltd. which is engaged in live hog farming and production of feeds and fresh processed meats in Vietnam.

SMC’s packaging business supplies the internal requirements of the Company and major Philippine-based multinational corporations such as Nestle Philippines, Inc., Unilever Philippines Inc., Kraft Foods Phils., Diageo Philippines, Inc., Del Monte Philippines, Inc. Coca-Cola Bottlers Philippines Inc., and Pepsi-Cola Products Philippines, Inc. SMC’s packaging group has Glass, Metal, Plastic, Polyethylene terephthalate (PET), Paper, and Composites.

SMC’s participation in the Power industry is through SMC Global Power Holdings Corp. (SMC Global). Currently, SMC Global derives its revenue from the sale of electricity under the Independent Power Producer Administrator (IPPA) contract with Independent Power Producers (IPP). IPPAs are responsible for the procurement of power plant’s fuel requirements and management of the contracted energy output of the facilities, including the sale of power and offering of ancillary services [3] while IPPs are private companies that owns and operates the power plants. [4] SMC Global is the IPPA for the Coal-fired Sual, natural gas-fired Ilijan and hydro-electric San Roque power plants which have combined contracted capacity of 2,545 MW.

In 2010, through a subsidiary, San Miguel Energy Corporation, SMC Global purchased 100% interest of Daguma Agro-Minerals, Inc. (DAMI), Bonanza Energy Resources, Inc. (BERI) and Sultan Energy Phils. Corp. (SEPC) for $ 25 million. [5] DAMI, BERI, and SEPC are in the exploratory stages of their mining activities. Delays of the production timetable were caused by the newly enacted Environment Code of South Cotabato that bans open pit mining. [6]

SMC operates its fuel and oil business through a wholly owned subsidiary Sea Refinery Corporation (SRC). SMC has 68.26% in a publicly listed oil refinery company, Petron Corporation (PSE: PCOR) with SRC owning 50.10% and SMC directly controlling 18.16%. PCOR dominates the petroleum industry and Liquefied Petroleum Gas (LPG) industry with 38.5% and 41.7% market share respectively. [7]

In 2011, a $2 billion refinery upgrade dubbed as Phase 2 of Refinery Master Plan (RMP-2) was launched that will enable PCOR to fully convert residual products to higher-value gasoline, LPG, diesel and propylene. PCOR is also constructing a $500 million co-generation power plant adjacent to the refinery plant in Limay, Bataan which can generate considerable cost savings in power consumptions and thus lower refinery costs. The first phase of the co-generation plant will be completed by the second half of 2013 while RMP-2 is expected to be completed in 2014.

Other significant investments:

In 2010, SMC subscribed to 10.1% interest in Inodphil Resouces NL (Indophil). As of December 31, 2012, SMC’s interest was diluted to 3.99% as a result to additional share issuances made by Indophil. Indophil has 37.5% beneficial ownership in Sagittarius Mines, Inc. which in turn holds a 40% controlling equity stake in the Tampakan Copper-Gold Project in Southern Mindanao.

SMC’s infrastructure business, San Miguel Holdings Corp. (SMHC), is engaged in the construction of Tarlac-Pangasinan-La Union Expressway (TPLEX), Metro Rail Transit Line 7 (MRT 7), NAIA Expressway, and Boracay Airport. The 46-kilometer first phase of TPLEX is expected to be operational in the third quarter of 2013 and the remainder 88-kilometer is expected to be completed by late 2014. Construction of 44-kilometer MRT 7 has not yet started. In May 6, 2013, SMC was awarded with P15.52 billion NAIA Expressway Project. [8] Construction of the project is expected to commence in January 2014. [9] SMC hopes to commence construction of the Boracay Airport by the first quarter of 2014 and to complete the project by 2015.

San Miguel Properties, Inc. (SMPI) hast the following projects:



  1. PureFoods investing P2.5B in grains terminal in Batangas,
  2. PF SEC 17-A 2012, Investments in Subsidiaries, p. 67,
  3. PSALM preparing to bid out 5 power contracts,
  4. RA 9136, Definition of Terms,
  5. San Miguel to expand Davao coal project,
  6. SMC SEC A17-A 2012, Investments in Subsidiaries, Note 6, p. 164,
  7. Oil Supply/Demand Report FY 2012,
  8. NAIA Expressway project,
  9. San Miguel to start building NAIA Expressway in January,

Disclaimer: I do not claim to be an expert and nothing I say should be taken as a recommendation to buy or sell. Read more in the ABOUT page.


2 thoughts on “Profiling: San Miguel Corporation (PSE: SMC)

  1. Pingback: Profiling SMC by Renzie Agutaya | Spyfrat's Call

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