UNIVERSITY OF THE PHILIPPINES
COLLEGE OF BUSINESS ADMINISTRATION
SAN MIGUEL CORPORATION
Founded as a single-product brewery in 1890, San Miguel Corporation today is the Philippines’ leading publicly held food, beverage and packaging company. Its flagship product, San Miguel Beer, caters to over 80% of the domestic market. It is a formidable contender in the local food and agribusiness industry, and likewise runs domestic and international packaging and brewery operations. It accounts for a major share of the Philippine beverage industry, particularly in the soft drink, beer and liquor segments.
The past ten (10) years have seen a succession of transactions involving its acquisition and divestment of several subsidiaries and affiliates, not least of which involved Coca-Cola Bottlers Philippines Inc. All these activities point to a fundamental corporate strategy of investment and expansion. To quote Company Chairman and CEO Eduardo Cojuangco, “We don’t want to buy anything just for the sake of acquiring something. We want something that fits.”
On September 29, 1890, Don Enrique Ma. Barretto de Ycaza, owner of the brewery La Fabrica de Cerveza de San Miguel had been authorized to brew beer in the Philippines under a Royal Grant. The new establishment located at No. 6 Calzada de Malacañang, in Manila’s San Miguel District, was inaugurated on October 4, 1890.
FOR CLASSROOM DISCUSSION ONLY
Arturo M. Ilano, Assistant Professor, University of the Philippines, with Melizza Freja G. Bautista, Mikhail Joseph T. Torres, and Biogene O. Yagong, prepared this case study as a basis for class discussion, and is not designed to illustrate effective or ineffective handling of managerial situations. Certain names have been disguised. The writing of this case study was supported by the Commission on Higher Education.
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Copyright © 2002 University of the Philippines College of Business Administration
After more than 110 years, San Miguel Corporation (SMC) now stands as one of the richest and most profitable companies in the Philippines, and is the country’s most recognized corporate brand. With nearly 30,000 employees in 90 major facilities in the Philippines and overseas (China, Southeast Asia and Australia), San Miguel Corporation is the country’s largest food, beverage and packaging company. Its affiliated brands include Magnolia, Anchor, Coca-Cola, Ginebra San Miguel, Purefoods and Monterey. It produces and markets close to 300 products among which are Star, B-Meg, Wilkins, VIVA!, Coca-Cola and Eight O’clock.
San Miguel Corporation has three core businesses: Beverages -- beer, hard liquor, soft drinks, bottled water, fruit juices; Food & Agribusiness – chicken, feeds, pork and beef, processed meats, dairy, oils and fats; and Packaging --glass, metals, plastics, paper products, flexible pouches and laminates.
Its beverage sector is San Miguel’s largest business segment, comprising over 58% of its total sales in year 2000. Its Food & Agribusiness sector contributed 27% and its Packaging Sector contributed 15% of its total sales. In terms of operating income, the beverage segment likewise contributed the largest, at 70%, with packaging coming in second at 22% and food & agribusiness at 8%.
The company is a consistent entry in the list of the country’s Top 500 Corporations. In 1999, it was ranked ninth in total revenues and registered the third highest reported profit. Thus, it is not surprising to note that it is a major contributor to the Philippine economy,...
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