Banking on strong consumer demand in one of Asia’s fastest-growing economies, the maker of San Miguel Pale Pilsen and Red Horse beer is setting up eight breweries around the country, San Miguel President Ramon Ang said in an interview.
San Miguel is also looking to open its first production facility in the United States and build a second plant in Vietnam, Ang said.
“This is not for the volume growth. This is more to be able to produce locally, regionally for fresh beer, for better quality of beer because it is locally available and also lower logistics costs”, he said.
San Miguel is the Philippines’ largest brewer, and its brewery business is partly owned by Japan’s Kirin Holdings Co Ltd. It has six existing breweries in the country, and six across Asia.
Each of its new breweries would have an annual capacity of 100-200 million litres and would cost at least US$100 million (RM410 million), San Miguel Chief Finance Officer Ferdinand Constantino said in the same interview.
At 10.6 litres per capita in 2017, beer sales in the Southeast Asian nation of over 100 million people have much room to grow. They pale in comparison with Vietnam’s 43.7 litres, China’s 29.8 litres, and Thailand’s 27.9 litres, data from statistics portal Statista showed.
Philippine beer sales are expected to grow by a fifth to US$1.74 billion (RM7.06 billion) in 2021 from US$1.44 billion (RM5.84 billion) last year, Statista data showed. Beer sales were US$1.03 billion (RM4.18 billion) in 2010.
San Miguel, valued at US$6.09 billion (RM24.69 billion), has pursued an aggressive expansion over the past decade to bolster revenues, adding infrastructure, mining, petroleum and power assets to its core food and beverage businesses.
Founded as a brewery in 1890, San Miguel dominates its home base for beer. The beer business accounted for nearly 13% of the conglomerate’s net sales in the first quarter of 2018.
San Miguel is also on track to sell up to US$3 billion (RM12 billion) worth of shares in its food unit in the fourth quarter despite recent market volatility, the executives said.
San Miguel shares were unchanged on Wednesday, but are up 22.7% year-to-date, bucking the 13% decline in the broader Philippines index, the worst-performing bourse in Southeast Asia so far in 2018.