San Miguel Purefoods to spend P10B in ASEAN expansion

MANILA, Philippines – San Miguel Purefoods Company (SMPFC), San Miguel Corporation’s food manufacturing unit, is spending P8 billion ($177.98 million) to P10 billion ($222.47 million) annually over a two to 3-year span in its bid to grow both its domestic and overseas markets.

The company is eyeing to build new facilities in Indonesia and Vietnam, including penetrating new markets Malaysia and Thailand, SMPFC president Francisco Alejo III said.

SMPFC is already in talks with potential partners for acquisitions and is also starting to identify overseas companies for possible acquisitions, Alejo added.

“With the planned expansion plans, we are poised to take advantage of the opportunities when the market improves,” Alejo said.

Domestically, SMPFC plans to build 10 new facilities in 2015 to increase production capacity of its flour mills, hotdogs, nuggets, feed mills, and poultry businesses.

Acquiring the trademark of local biscuits maker La Pacita enabled SMPFC to venture into biscuits and snack foods business. As such, the company is again in talks with another local firm for possible acquisition.

The company is also planning to expand its bakery business by putting up 5,000 Kambal Pandesal stores by 2020. At present it has 500 stores.

Bullish for 2015

SMPFC is also bullish for 2015 as the domestic economy remains strong.

 “We are optimistic for 2015 because of the increasing purchasing power of Filipinos,” Alejo said.

But the port congestion remains a problem for the company that it has to resort to higher priced substitute raw materials, Alejo said.

Also, SMPFC is currently raising as much as P15 billion ($33.87 million) through issuance of preferred shares.

SMPFC will issue 10 million in preferred shares as primary offer and another 5 million in oversubscription at an offer price of P1,000 ($22.26) per share.

Proceeds from the offering will be used to refinance the company’s P15 billion ($33.64 million) outstanding preferred shares callable by March 2015.

The dividend rate will be set on February 11, while offer period will be from February 16 to March 5.

The issue date was set on March 12.

BPI Capital, China Banking, RCBC Capital Corp, SB Capital Investments Corp, and Standard Chartered Bank were tapped as joint issue managers, underwriters, and book runners for the offering. – Rappler.com

$1 = P44.96