Tapping Growth

San Miguel lured investors back to its beer and food businesses by pouring both into a single stock.

- Roel Landingin

San Miguel’s Billionaire President Ramon Ang turned 65 in January, an age when many think about slowing down. Instead, Ang is busy or-chestrating a massive expansion planned as the biggest in the 129-year history of the Philippine conglomerate. Within five years, he aims to more than double the group’s production capacity, which in 2017 stood at 19 million hectoliters of beer and 2.6 million tonnes of feed. “Our target is to put up 10 new breweries with an initial capacity of 2 million hectoliters each,” says Ang in a rare interview. “On our food expansion, we are on track to finish our 12 brand-new feed mills of 500,000 annual tonne capacity per feed mill by 2023.” Agribusiness expert Rolando Dy at the University of Asia and the Pacific in Manila sums up the plan simply: “It’s unprecedented.”

Details of the new plan were announced last June during a shareholders’ meeting. They come on the heels of a restructuring that Ang started in January 2018, when he merged San Miguel’s beer and liquor business into its listed food unit, renaming the combined entity San Miguel Food and Beverage, or SMFB. The company’s market capitalization jumped to $7 billion from just $2 billion on the move. By November, the company sold just under 7% of its shares in a deal valuing SMFB at $10 billion, 35% higher than when the merger was announced. So far this year, SMFB stock has climbed more than 20% to about 100 Philippine pesos, after languishing for most of this decade at below 50 pesos.