San miguel beer
San Miguel Corporation - Company Profile, Information, Business Description, History, Background Information on San Miguel Corporation
Mandaluyong City
Metropolitan Manila
Philippines
History of San Miguel Corporation
Best known for its internationally distributed beer, San Miguel Corporation can only be described in superlatives.
It is Southeast Asia's oldest and largest brewer. With nearly 33, employees, the company also ranks among the Philippines' largest, most consistently profitable, and most admired manufacturers. San Miguel's flagship beer utterly dominates both the Filipino and Hong Kong markets, with 90 percent and 60 percent respective shares.
Brief history of san miguel The industrious settlement consisted of many buildings and, as in other missions, Indian converts became accustomed to carrying on several trades. In , San Miguel sales exceeded a billion pesos for the first time and profits topped the hundred-million-peso mark. The monastery edifice, now a museum, is fronted by a colonnade of arches where visitors stand in the shade to look out to a famous cactus garden. In fact, Marcos and Cojuangco left in the same helicopter.A brief in The Economist noted that Filipinos order "beer" at bars and restaurants, knowing that they'll receive a San Miguel. But San Miguel didn't make it to the top of the regional heap on good beer alone. It also makes agricultural feeds, processed and fresh meats, ready-to-eat foods, packaging, and non-alcoholic beverages.
By the early s, beer constituted about half of San Miguel's annual turnover.
In fact, the conglomerate has grown over the course of its more than years in business to generate four percent of its home country's gross national product and six percent of tax revenues.
San Miguel grew to its commanding position in the Southeast Asian market in spite of political upheaval, infrastructure glitches, and high taxes.
It achieved its status through aggressive competitive strategies and shrewd long-range planning over the decades. Having diversified into agribusiness, foods, and packaging in the midth century, the conglomerate dominated its domestic markets by the early s. At that time, San Miguel undertook an aggressive program of international expansion that came to fruition in the mid-to-late s.
Don Enrique Ma Barretto de Ycaza established the brewery, Southeast Asia's first, in as La Fabrica de Cerveza de San Miguel.
He named the company after the section of Manila in which he lived and worked. He was soon joined by Don Pedro Pablo Roxas, who brought with him a German brewmaster. San Miguel's brew won its first major award at 's Philippines Regional Exposition, and led its imported competitors by a five-to-one margin by the turn of the 20th century.
The company was incorporated in following the death of Don Pedro Roxas.
By that time, San Miguel was exporting its namesake brew to Hong Kong, Shanghai, and Guam.
Brief history of san miguel corporation Cosmos specialized in low-priced soft drinks and held the number two position in the Philippine market. With its domestic "ducks in a row," San Miguel turned to the next stage in its internationalization, beer licensing and exporting initiative. These efforts laid the groundwork that would enable the company to compete with the world's food and beverage multinationals. Foshan San Miguel Packaging Co.Andrés Soriano y Roxas joined San Miguel in , beginning a multi-generation (albeit interrupted) reign of Sorianos. In , San Miguel's Beer Bulletin noted that "Beer was the heart of San Miguel's business, and the soul from which emanated all its other businesses." Andrés Soriano initiated the company's diversification, which proceeded rather logically via vertical integration.
The experience cultivating barley naturally evolved into other agricultural businesses, for example. San Miguel gathered steam in the s, when the company expanded into nonalcoholic beverages with the creation of the Royal Soft Drinks Plant in San Miguel entered the frozen foods market in with the creation of the Magnolia Ice Cream Plant. By the early s, Magnolia held four-fifths of the frozen dessert market.
Soriano created the first national Coca-Cola bottling and distribution franchise in The Philippine company owned 70 percent of the joint venture, which grew to become Coke's sixth-largest operation. By the early s, San Miguel had captured over two-thirds of the domestic soft drink market.
Although World War II interrupted San Miguel's brewing business, the company got back on the growth track in the postwar era, acquiring production facilities in Hong Kong in The company also resumed its program of vertical integration, even building its own power plant so that it would not be dependent on the Philippines' notoriously poor infrastructure.
San Miguel also built a liquid carbon dioxide plant, glass bottle manufacturing facilities, and a carton plant during the postwar period.
The company shortened its name to San Miguel Corporation in the early s, and Andrés Soriano, Jr. advanced to the company's presidency upon his father's death. He has been credited with instituting modern management theory, including decentralization along product lines.
History of san miguel corporation: It is a wooden frame over which cowhide was stretched thinly, then carefully shaved and greased to increase its translucence. Soon, San Miguel became a fairly prosperous mission, despite poor soil and hot climate did not compare well with the more fertile coastal regions. After the "People Power" revolution in , Corazon Aquino, Cojuangco's estranged cousin, became president of the Philippines. The controlling interest carried nine of San Miguel's 15 directors seats with it.
Soriano Jr. continued to diversify the food business during the early s, expanding into poultry production in , building an ice cream plant in , adding shrimp processing and freezing in , and adding beef and pork production in
Over the decades, San Miguel earned a formidable reputation as a fierce competitor. The company used all the tools at its disposal.
When it could not beat a rival through traditional means, it acquired and intimidated upstarts into submission. The Filipino government's complicity didn't hurt, either. Long protected by high tariffs, San Miguel encountered its first major competitor in the beer market in the late s. That's when Asia Brewery entered the segment.
The rivalry between Asia Brewery and San Miguel came to a head in , when Asia Brewery cannily introduced a bargain-priced "brand" called, simply, "Beer." The imported product looked and tasted like its primary competitor, playing upon the fact that in the Philippines, the San Miguel brand was synonymous with "beer." It was a creative counter to San Miguel's notoriously aggressive and sometimes cutthroat competitive strategy, which had reportedly included "attempts to sabotage [Asia Brewery's] sales network and smash its empty bottles." Asia Brewery, whose owner was reputedly connected to Marcos sympathizers, even hired away San Miguel's brewmaster.
Although San Miguel enjoyed virtual monopolies in its markets, that status did not shield it from the political machinations of the Philippines.
The reign of Ferdinand Marcos brought this element into sharp focus in the s, when an intra-familial proxy fight at San Miguel turned political.
History of san miguel bulacan San Miguel Yamamura Asia Corp. His efforts met with the same hostility that the Padres of the other Missions encountered, and Father Cabot eventually discarded the expansion project. Net income increased twice as fast, from P 1. In , San Miguel sales exceeded a billion pesos for the first time and profits topped the hundred-million-peso mark.The dispute was instigated in by Enrique Zobel, a wealthy cousin of the Sorianos who owned the Ayala banking and real estate group and sided with the Marcos government. Unable to execute a takeover on his own, Zobel sold his percent stake to Eduardo Cojuanco, Jr. (known in some circles as "the coconut king"). Although Cojuanco was a cousin of Marcos opponent Corazon Aquino, he too sided with Marcos.
Cojuanco's Coconut Industry Investment Fund (a.k.a. United Coconut Planters Bank) accumulated an additional 31 percent of San Miguel, giving him effective control of the conglomerate and leaving the Soriano family with a mere three percent. Cojuanco scooped up the chairmanship in , when Andrés Soriano Jr. died of cancer. But his reign over San Miguel lasted only two years.
When Marcos lost the election to Aquino, Cojuanco and many other Marcos backers fled the country.
Andrés Soriano III resumed San Miguel's chairmanship and launched a campaign to reclaim the family legacy that year. But when the new chairman tried to buy back the abandoned shares, he was blocked by an unexpected agency; the Aquino administration's Presidential Commission on Good Government (PCGG) assumed control (but not legal ownership) of the percent stake and refused to relinquish it.
The controlling interest carried nine of San Miguel's 15 directors seats with it. The PCGG continued to tend its San Miguel stake into the early s, but it acceded de facto control of the conglomerate to Andrés Soriano III via a management contract with his A. Soriano Corp.
Soriano III was characterized by Business Week's Maria Shao as an "introverted, almost reclusive" leader.
History of san miguel iloilo Cojuangco moved quickly to turn around the fortunes of the foundering company. Although the company had exported beer for most of its history, this effort was intensified dramatically in the late s. San Miguel Packaging Products services many of the region's leading food, pharmaceutical, chemical, beverages and personal care manufacturers. After the war, San Miguel rebuilt and mounted a large-scale expansion program.Schooled at the University of Pennsylvania's prestigious Wharton School, Soriano III had dabbled in investment banking in New York City before returning to the Philippines. Soriano tried everything from legal machinations to joint-venture buyout schemes to wrest control of San Miguel from the PCGG, but to no avail.
In , San Miguel threw a five-month party to celebrate its centenary.
President Corazon Aquino called San Miguel "the best showcase of a Filipino company, a shining example of creative management and commitment to its public." The Economist contrastingly called San Miguel "a showcase for much that is wrong with business in the Philippines." The latter assertion was substantiated that same year, when Cojuanco returned to the Philippines (the Journal of Commerce noted that he "sneaked back into the country [in ] despite a ban on his return") to lay claim to his holdings.
Notwithstanding the circumstances of his repatriation, a November article in Asian Business noted that "Cojuanco [was] expected to win eventually." All the same, Soriano III continued to hold the chairmanship through
Soriano III led the company to a new era of dramatic growth based on internationalization. This move was motivated by a number of factors.
First, San Miguel had developed its core Philippine and Hong Kong markets to maturity and was faced with relatively slow growth there. Soriano hoped to expand into other countries and thereby mitigate the effects of the Philippines' unstable economy. Finally, the leader wanted to head off encroaching competition from the world's biggest breweries, namely Anheuser-Busch and Miller of the United States, Kirin of Japan, and BSN of France.
In an interview with Asian Business' Michael Selwyn, San Miguel President Francisco C. Eizmendi Jr. said that "what we are aiming to do is be a David among the Goliaths of international business, without losing our grip on the local market."
Having determined that overseas growth was imperative, Soriano allocated US$1 billion to a five-year strategic internationalization program that focused on shaping up domestic operations, then progressing to licensing and exporting, overseas production, and finally to distribution of non-beer products.
San Miguel's plant modernization plan involved sweeping improvements, from computerization to quality circles. These efforts laid the groundwork that would enable the company to compete with the world's food and beverage multinationals. A subsequent decentralization created a holding company structure with the 18 non-beer operations positioned as subsidiaries.
This corporate reorganization freed the spun-off businesses from the bureaucratic shackles of a large conglomerate. In the course of this multifaceted effort to attain optimum efficiency, San Miguel reduced its work force by more than 16 percent, from a high of 39, to 32, by Asian Business noted that these programs helped increase profit per employee by 56 percent in alone.
With its domestic "ducks in a row," San Miguel turned to the next stage in its internationalization, beer licensing, and exporting initiative.
Although the company had exported beer for most of its history, this effort was intensified dramatically in the late s. San Miguel's beer exports grew by percent from to alone, and the brand was soon exported to 24 countries, including all of Asia's key markets as well as the United States, Australia, and the Middle East. Once the core brand was established in a particular market, San Miguel would begin to create production facilities, sometimes on an independent basis and sometimes in concert with an indigenous joint-venture partner.
By , San Miguel had manufacturing plants in Hong Kong, China, Indonesia, Vietnam, Taiwan, and Guam.
Thus, in spite of the overarching quarrel regarding San Miguel's ownership (not to mention other problems endemic to operating in the Philippines), the company's sales quintupled from P billion in to P billion by The conglomerate's heavy investment in the internationalization program paid off handsomely; net income increased twice as fast, from P billion to P billion over the same period.
Under the continuing direction of its year-old leader in , San Miguel was well-positioned to take advantage of the dramatic growth forecast for the Asia-Pacific region in the s and beyond.
Principal Subsidiaries: San Miguel International Limited; San Miguel Foods, Inc.; SMC Stock Transfer Service Corporation; Premium Packaging International, Inc.; Packaging Products Corporation; Rightpak International Corporation; Pacific Warehouse Company; SMC Juice, Inc.; Tagbita Silica Industries Corporation; San Miguel Properties Philippines, Inc.
(99%); Philippine Breweries Corporation (99%); Monterey Farms Corporation (93%); Coca-Cola Bottlers Philippines, Inc. (70%); La Tondeña Distillers, Inc. (70%); Philippine Dairy Products Corporation (70%); San Miguel Campofrio Corporation (60%); San Miguel Yamamura Asia Corporation (60%); Rizalag Land Company, Inc.; Mindanao Corrugated Fibreboard Inc.
(60%); SMC Yamamura Fuso Molds Corporation (60%); San Miguel Yamamura Ball Corporation (60%); Anchor Insurance Brokerage Corporation (58%).
Additional Details
- Public Company
- Incorporated:
- Employees: 32,
- Sales: P billion ()
- Stock Exchanges: Philippine
- SICs: Beverages; Meat Products; Dairy Products; Glass Containers; Paper Coated & Laminated Packaging
Further Reference
Abueg, Jose Marte, "Soriano Adjusts to Aquino," Asian Business,September , p., Lindsey, and Thomas Stanley, "San Miguel's Expansion Into Southeast Asia," Journal of Asian Business,Summer , pp. Caplen, Brian, "San Miguel Brewery: Brewing Up New Business," Asian Business,April , pp. Furukawa, Tsukasa, "Ball Joins Philippine Can Venture," American Metal Market,October 20, , p.
, Arthur, "The Philippines," Forbes,December 19, , p. "Mine's a Beer (Patent Pending, All Rights Reserved)," The Economist,October 29, , p. Moore, Hannah, "Battle for San Miguel Brewing in Philippines," The Journal of Commerce,March 6, , p. 3A."Opéra Bouffe," The Economist,April 28, , pp. "The Philippines," Asiamoney,July/August , p.
"Returning the Empties," The Economist,April 5, , pp. "San Miguel Corporation: A Tradition of Leadership," Scientific American,February , p. PSelwyn, Michael, "The Secrets of San Miguel's Sparkle," Asian Business,November , pp. , "Honour Is the Watchword," Asian Business,November , pp. Shao, Maria, "Andrés Soriano's Battle for San Miguel," Business Week,September 28, , p.