SAN Miguel Brewery Inc. (SMB) said it sees its nonalcoholic beverage unit, which it purchased from its struggling sister firm, to comprise about 30 percent of its revenues in five years.
Ramon S. Ang, the company’s chairman, told reporters that the company will start selling products, such as flavored water, iced coffee and carbonated water, some of which may carry the products of Japan’s Kirin Holdings Co. Ltd.
“In the next five years, we think the nonalcoholic beverage can add 30 percent of the revenues,” Ang said on the sidelines of the company’s stockholders’ meeting.
He said the company may start selling its nonalcoholic products locally by next year.
Kirin owns 48.5 percent of San Miguel Brewery and some 51 percent are owned by conglomerate San Miguel Corp.
The company said its net income grew 20 percent to P3.26 billion during the first three months of the year from P2.73 billion last year.
Consolidated revenues reached P18.88 billion for the first quarter of 2015, an 8-percent improvement from the P17.56 billion in 2014.
The company outsells every other beer maker in the country at about nine to one but still struggles to compete with other brands, such as the alcohol-laced pop drinks, as local drinking habits change.
In its Philippine operations, the company said it implemented new campaigns and consumer and trade programs to strengthen brand equity and increase consumption.
Despite the imposition of higher excise taxes, volumes grew by 7 percent to 40.9 million cases.
With higher volumes, revenues reached P16.2 billion against the P13.8 billion in 2014.
Philippine operations’ net income rose by 29 percent, ending the first quarter with P3.2 billion.
SMB was delisted from the Philippine Stock Exchange in 2013 after it was unable to comply with the regulators’ minimum requirement of public float.
“I think, at the moment, the shareholders do not intend to list again,” Ang said. The company recently acquired the nonalcoholic beverage assets of its struggling sister firm Ginebra San Miguel Inc. to diversify its revenue sources.
“We were not able to comply with the requirements because Kirin is not willing to go down. We are not willing to go down. We want to maintain 51 [percent of SMB], they want to maintain 48 [percent],” Ang said earlier.
SMB went public about seven years ago and its initial public offering was among San Miguel’s earliest moves to diversify from mainly a food and beverage company to heavy industries, such as power generation and infrastructure.