San Miguel Foods Inc., the food unit of conglomerate San Miguel Corp. (SMC), will spend an additional P30 billion in capital expenditures this year to expand its existing feed mills and build 7 new ones.
Ramon S. Ang, San Miguel Food and Beverage Inc. (SMFB) president and CEO, said the amount will be spent to expand its feed mill in Echague in Isabela City from its current capacity of 500,000 tons per year.
Ang said the company is also expanding its facilities in San Ildefonso in Bulacan, Sta. Cruz in Davao and Mandaue in Cebu.
“And we are also in the process of building 7 new feed mills. And these are greenfield projects of which each of this project cost about I think $50 million,” Ang said during SMFB’s stockholders’ meeting. He did not elaborate on the location of the new feed mills.
San Miguel Foods had a net income of P3.39 billion in the first quarter, more than double from the same period last year, the company said.
First quarter consolidated revenues reached P36.18 billion, up 9 percent from the same period in 2020. Growth was driven by demand and more stable pricing across all business segments.
It said its protein segment, which posted an 11-percent year-on-year growth, continues to recover given improved market demand-supply dynamics.
The company said it was able to adapt to changes by launching its community resellers program, now totaling close to 11,000 active resellers, to improve availability and consumer access to its poultry and other products.
Its prepared and packaged food segment, meanwhile, continues to remain a bright spot for the business, growing 6 percent as consumers continue to prefer at-home dining, it said.
“As we continue to navigate the pandemic, we remain optimistic about the future and stay focused on driving investments in products and innovate on systems that will better address the needs of Filipinos. We will work hard with greater efficiency and flexibility in order for our country to emerge from this pandemic stronger and more formidable,” Ang said.
Meanwhile, SMFB’s income in the first quarter rose 66 percent to P9.68 billion from last year’s P5.82 billion as the company implemented programs to adapt to changing market conditions.
Consolidated sales reached P76.36 billion, up 11 percent from last year’s P69.01 billion.
SMFB, through San Miguel Foods Inc., is the largest producer of animal feeds and operates a nationwide manufacturing network which includes 37 feed mills across Luzon, Visayas and Mindanao.
The Food Division recently built six new feed mills of which two facilities are in Luzon, in Bataan and San Ildefonso, and two in Davao and Misamis Oriental.
For the Animal Nutrition and Health segment, compound feeds are manufactured at 14 company-owned feed mills, 7 of which are located in Luzon, 3 in Visayas and 4 in Mindanao, plus 23 third party-owned and operated feed plants located throughout the Philippines.
Most of these plants are capable of producing pelleted and crumble format feeds and two plants have extrusion capabilities to produce aquatic floating feeds.
The feeds business also maintains tolling arrangements for 8 rendering facilities that convert animal by-products used as raw materials into some feed types.
The Animal Health and Nutrition segment had built 5 new feed mills with an estimated capacity of approximately 1,500 thousand metric tons for the period 2018 to 2020, one of which is equipped with capability to produce aquatic floating feeds.
These increased the Food Division’s capacity for higher margin products and help supply the Visayas-Mindanao region.