San Miguel Corporation

ABOUT THIS COMPANY:

Originally establishing itself as a brewery in the Philippines in 1890, the San Miguel Corporation has since developed into one of Southeast Asia's largest food, beverage and packaging companies. Boasting a workforce of over 15,000 employees spread across 100 major facilities, the San Miguel Corporation is a domineering presence in its domestic market as well as an internationally recognized brand. The company's manufacturing facilities stretch to China, Hong Kong, Indonesia, Malaysia, Thailand and Vietnam, while its products are exported to over 60 markets worldwide.

Domestically, the company's chief brand -- San Miguel Beer -- has become synonymous with the product itself; locals generally expect to be served the San Miguel brand upon ordering a beer. As the leading beer in Philippines, the brand has gone on to become one of the highest-selling beers in the world -- among the top 20 beer brands worldwide.

As the Philippines' second-largest listed group, San Miguel has several companies listed on the stock exchange, including Ginebra San Miguel, San Miguel Purefoods and San Miguel Properties. It's even on the Forbes Global 2000 list, coming in at No. 1,984 in 2008 -- one of only two Philippines-based companies to make the cut.

Mixing drinks and a lot more

The success of the company's flagship product allowed the San Miguel Corporation to diversify into other sectors. San Miguel is divided into three primary segments: beverages, food and agribusiness, and packaging.

The beverage business includes beer, hard liquor and non-alcoholic beverages. Top beer brands include San Miguel Beer Pale, San Mig Light, San Mig Strong Ice, San Mig Super Dry, Red Horse, Cerveza Negra and Gold Eagle. Harder liquors include top gin brand Ginebra San Miguel, Anejo Rum, Antonov Vodka, Don Enrique Mixkila Spirit, Gran Matador Brandy and St. George Premium Whisky. The firm's primary non-alcoholic brand is Magnolia, which produces bottled water, fruit drinks and teas.

San Miguel's food and agribusiness encompasses agro-industrial business, milling, processed meats, dairy, oils and fats, and food service. (Inexplicably, instant coffee is also included in this segment.) Finally, the packaging segment includes glass, metals and aluminum cans, plastic (cases, crates and PET), paper products, and flexible pouches and laminates.

Through San Miguel Properties, established in 1990, the firm also operates heavily in commercial and retail real estate in the Philippines. Recently, the San Miguel Corporation has begun a foray into other sectors -- namely banking, infrastructure, utilities and power. Supported by the liquidation of large amounts of its major assets coupled with the public listing of its domestic beer unit, the company has managed to gain a foothold in the banking industry through San Miguel Properties' purchase of a 34 percent stake in Bank of Commerce.

A pioneer beer

La Fabrica de Cerveza de San Miguel, Southeast Asia's first brewery, was established in 1890 in Manila, by Enrique Barretto de Ycaza. He was later joined by Pedro Pablo Roxas, who brought a German brewmaster on board, and by 1895 the beer had won its first major award at the Philippines Regional Exposition. By the end of the 20th century, San Miguel had become the Philippines' leading beer, at a five-to-one advantage over its imported competitors. Following the death of Roxas, San Miguel was incorporated in 1913. In 1918, Andres Soriano y Roxas joined San Miguel as an accounting clerk, and by the 1920s, the powerful Soriano and Roxas families were effectively controlling the company -- a legacy that continued for generations to the mid-1980s. By the time of the company's incorporation in 1913, San Miguel's beer was seeing international interest, garnering demand and exports to foreign markets such as Shanghai, Hong Kong and Guam.

Building on the brewery's success, San Miguel began to diversify into new fields. Initially focusing on the food and beverage market, the firm developed and introduced a series of new brands throughout the 1920s as a natural progression from its roots in barley. The firm's Royal Soft Drinks plant was established in 1922, hailing San Miguel's entry into the market for other beverages. In 1927, San Miguel established a joint venture with Coca-Cola for a bottling and distribution franchise, the first such franchise to be founded off U.S. soil. During this period, San Miguel also entered the frozen food market, setting up the Magnolia Ice Cream plant. These businesses proved hugely successful, as by the 1990s, the company held two-thirds of the soft drink market and four-fifths of the frozen dessert market in the Philippines.

San Miguel faced a major setback during World War II, as production ground to a halt. After the war, the company began to aim towards self sufficiency, even developing its own power plant, liquid carbon dioxide plant, and glass bottle and carton manufacturing facilities so it didn't have to depend on the Philippines' post-war infrastructure. In 1948, San Miguel acquired Hong Kong production facilities -- becoming the first local brewer in Hong Kong. Expansion and diversification continued from the 1950s into the 1980s. By 1984, the company had developed a new ice cream plant and had entered the meat market with the construction of a poultry production plant and a shrimp processing and freezing facility.