San Miguel expands in China

Related tags Brewing Brewery

Leading Philippines food and beverage company San Miguel has
announced plans to open a soft drinks factory in the Shunde
district of Guandong Province, southern China.

According to a Financial Times report the facility will manufacture tea, juices and other non-alcoholic beverages.

The move is a new direction for San Miguel's operations in China. Currently it has five operations in the country all of which are beer brewing plants. Indeed one of the breweries is already located in Shunde where the company also has a packaging factory.

San Miguel​ said it had come to an arrangement with local authorities which ensured a license to make and sell soft drinks in the region. Guandong Province has become one of China's leading regions for industry, attracting increasing amounts of investment, particularly on the back of its biggest city, Shenzen, which is a designated special economic zone.

According to the report San Miguel said that the decision to go ahead with the plant was vital to its long-term strategy in the region. Until now the group's overseas ventures have concentrated on its beer activities. However in the domestic market San Miguel has a dominant position in just about every sector of the food and beverage market. The future strategy for expansion in Asia will now start to focus on the soft drinks sectors. In line with this the company recently acquired the Thai Amarit brewery in central Thailand, which it is planning to build an adjacent soft drinks manufacturing plant.

Currently 10.5 per cent of the company's total revenues are accounted for by its overseas operations. The main markets include Vietnam, Indonesia and Australia, but the China and Hong Kong market is by far the biggest accounting for more than half the total overseas turnover.

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