SAN MIGUEL CORP BUYS THAI BREWER'S ASSETS FOR $102-M

MANILA, April 12, 2004 (STAR) By Zinnia B. Dela Peńa  - Food and beverage conglomerate San Miguel Corp. (SMC) has signed a definitive sale and purchase agreement with Thai Amarit Brewery Ltd. for the purchase of the latter’s $102 million worth of assets.

In a statement, SMC said the deal involves the acquisition of a modern and fully-equipped brewery on a 21.75 hectare property located at the Pathum Thani province in Central Thailand, about 30 kilometers north of Bangkok.

Using state-of-the-art technology from Europe, the brewery has the capacity to produce about one million hectoliters.

SMC said the acquisition will fasttrack its entry into the fast-growing and largest beer market in Southeast Asia. Thailand’s beer consumption per capita is among the highest in Asia.

SMC said it will also acquire Thai Amarit’s 2.4-hectare property strategically located at the Bang Po area of Metro Bangkok, which has an existing port facility that gives it access to the Chao Phraya River.

The deal, SMC added, is expected to close within 30 days from signing of the agreement.

SMC views Thailand as a strategic investment site due to its huge beverage market, competitive investment and tax incentives, well-developed infrastructure and proximity to other target markets like Cambodia, Laos and Myanmar. It also considered Thailand’s political stability and high economic growth rate.

Just last month, SMC – Southeast Asia’s largest food and beverage business – broke ground for a manufacturing plant at the Amata City (Rayong) Industrial Estate in Thailand, the first among many groundbreaking activities scheduled within the year to include Australia, Indonesia, Vietnam, Taiwan, China and Malaysia.

The Amata City venture called San Miguel (Thailand) Co. Ltd involves manufacturing and distribution in Thailand of all of San Miguel’s product lines, including beverage products, processed food and snacks, and feed mill operations.

The first phase of the venture is the construction of a non-alcoholic beverage facility in the Amata industrial estate, where SMC will distribute its own brand of softdrinks. The beverage operations in Thailand are expected to start in 2005.

The second phase will involve processed food and the feeds business, while the third phase will involve the packaging business.

SMC is embarking on a regional expansion program, with an initial budget of $100 million or P5.5 billion for each country. It aims to expand in seven Asian countries this year to propel growth as it faces saturation in the local market, where it dominates the beer, liquor, soft drink and food sectors.

The company, 15 percent owned by Japan’s number two brewer Kirin Brewery Co Ltd., operates breweries and packaging plants in Vietnam, Indonesia and China and a brewery in Australia. Its products, principally beer, are exported to over 20 countries.

SMC’s international operations currently contribute about 15 percent of total revenues. After more ventures into other countries, their contribution can go up to 60 to 70 percent.

The company is also looking at more acquisitions in the region. It has confirmed talks with Malaysia’s diversified conglomerate, the Lion Corp, which has 11 joint venture brewery plants in China.

SMC already has four breweries in China, the world’s biggest producer of beer by volume. With rising consumption, China has toppled the US as the world’s biggest beer market last year.


Reported by: Sol Jose Vanzi

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