In this third and final part of my series on San Miguel Corp., I quote liberally from the speech delivered by Ferdinand K. Constantino, the chief financial officer and a director of the beer, food, petroleum and infrastructure conglomerate, the Philippines’ largest, at its June 14 annual stockholders’ meeting.
The biggest change in San Miguel, said the company’s top financial honcho is this: “We no longer just think ‘consumers’ and market share, we think ‘people,’ their empowerment, and how we might fulfill a social purpose.”
Here is FKC:
With the Philippines among the top performers in the region, all of us at San Miguel are proud to be helping our country grow while delivering a combination of consistently strong financial results and record-breaking performance.
2017 marked the 10th year since our transformation from a food, beverage, and packaging firm, into what we are today: A diversified conglomerate with leading positions in basic industries that support nation-building.
Our performance confirms how much stronger our core and new businesses have become, and how better-placed we are to meet the opportunities afforded by our robust economy.
2017 consolidated revenues amounted to P826 billion—a huge 21 percent jump from the record P685.3 billion we posted in 2016. Operating income rose 11 percent to P111 billion. Our recurring net income was also higher by 11 percent at P54.7 billion. Earnings before interest, taxes, depreciation and amortization rose 13 percent to P147 billion.
Despite the challenges each of our businesses faced, all of them turned in strong results—proof that we have learned to manage and harness the collective revenue-generating potential of our diversification.
Where we are today validates what we have believed all these years: That while our diversification demanded much in terms of time, energy and resources, the experience and skills we have gained has definitely transformed us and our way of thinking.
This, for us, has been the most important change. Today, we no longer just think “consumers” and market share, we think “people,” their empowerment, and how we might fulfill a social purpose.
We no longer just aim for environmental compliance, we think sustainability and continuing growth for the Philippines.
The new perspectives we initiated in 2017 resulted in a recasting of our company’s vision, mission, and values.
Our new vision very clearly reflects how we see ourselves in the context of our country’s development. It puts emphasis on us having a strong sense of social, environmental, and economic responsibility, and declares our commitment to deliver on our nation’s goals.
Let me now focus on some of the concrete ways we’re doing this:
Within the next three years, we expect to complete the largest capacity expansion in the history of our food and beverage businesses, to meet growing demand for our products and maintain cost affordability.
We are constructing a new brewery in Misamis Oriental, Mindanao.
We are also expanding the capacity of our bottling plant in Sta. Rosa, Laguna.
We’re currently studying the possibility of putting up additional breweries in Luzon, where demand is growing.
We are building a total of 17 facilities for our food business.
This year, we’ve already completed and inaugurated our new hotdog manufacturing facility in Cavite, effectively doubling our capacity.
We have also completed a feedmill in Mariveles, Bataan, and are completing another one in Bulacan province.
This expansion seeks to address the rising demand by consumers of quality products at affordable prices. At the same time, such expansion will provide thousands of new jobs and spark growth in local economies in various regions nationwide.
The impact of this unprecedented expansion of our food and beverage businesses becomes even more compelling in light of our decision to consolidate San Miguel Brewery, San Miguel Pure Foods, and Ginebra San Miguel, into one powerhouse company: San Miguel Food and Beverage Inc.
Effectively, we are creating the biggest consumer company in the Philippines. By doing this, we will be able to extract significant synergies and use their combined strengths to great advantage.
In terms of our newer businesses:
Petron Corp. continues to expand its total retail network here in the Philippines and in Malaysia. Currently, we have breached 3,000 stations.
Our Tarlac-Pangasinan-La Union Expressway is nearly complete. Recently, we submitted a proposal to extend TPLEX.
Our Skyway Stage 3, MRT-7, Boracay Airport expansion, and Bulacan Bulk Water Supply projects, are all on track.
Our newest infrastructure projects—the South East Metro Manila Expressway, or Skyway 4, and the SLEX-TR4, are in the early stages of development.
But perhaps no other infrastructure initiative will be as game-changing for the Philippine economy than our proposal to build a new international airport.
This massive airport complex will include four runways with space for an additional two; modern passenger terminals with capacity for 100 million, scalable to 200 million. It will also have a modern air cargo complex. All these will be situated on a 2,500-hectare complex in Bulacan.
While our ongoing major initiatives will ensure that we achieve our bottom line objectives, we have not relented on our social responsibility.
In 2017, we put particular focus on the effort to rebuild Marawi.
We donated P1.5 billion for the construction of new houses for families affected by the Marawi siege.
To honor the 166 soldiers and policemen who were killed in the Marawi conflict, we provided each of their families a business startup package worth P2 million.
We are also building a P1-billion housing project in Davao.
In the area of sustainability, our ambitious target is to cut 50 percent of our total domestic and utility use of water by year 2025.
For 2017 alone, we already cut consumption by 14 percent, well above our intermediate goal of 20 percent reduction by 2020.
On behalf of our chairman, Mr. Cojuangco, to give due recognition to the person who has been at the helm of this extraordinary journey.
Mr. Ang’s ability to dream bigger things for San Miguel and his boldness to set our company apart from the rest, has driven our company to perform as never before.