Bulacan State University

College of Business Education and Accountancy

Bachelor of Science of Accountancy

CASE STUDY ON A PHILIPPINE

CORPORATION: BUSINESS LOGIC AND
STRATEGIC DECISION MAKING
(SAN MIGUEL CORPORATION)

Members (BSA 2B):

Cabingao, Vina Marie H.
Lucrida, Faye Mariz C.
Quijano, Katherine S.
Santiago, John Prince M.
Santos, Alessandra Monique A.
Tambaoan, Mary Jane G.
Valcos, Lianne May O.
 Company Background and History

With origins in the Spanish colonial era, San Miguel Corporation (SMC) is one of the Philippines' most
enduring and significant conglomerates. La Fábrica de Cerveza de San Miguel, the first brewery in Southeast
Asia, was established in 1890 by Don Enrique María Barretto de Ycaza and has since grown into a multifaceted
multinational corporation. What began as a small beer manufacturer in Manila has expanded into a major force
with holdings in infrastructure, food and beverage, energy, and packaging. The company's development into a
significant force in both domestic and foreign markets was made possible by its early leadership, wise
acquisitions, and innovative expansions. This historical overview traces the significant milestones in SMC’s
development — from its founding and early expansion, through post-war diversification, to its more recent
ventures into infrastructure and sustainability. Indicated below highlights the SMC’s major milestones —
founding, expansion, major product launches, crises, leadership changes, and mergers/acquisitions.
I. Founding and Early Expansion (1890 – 1945)
Don Enrique María Barretto de Ycaza founded San Miguel Corporation in Manila in 1890 under the name La
Fábrica de Cerveza de San Miguel. The Philippines' most recognizable conglomerate began with this brewery,
the first of its kind in Southeast Asia. The remaining Barretto shares were purchased in 1899 by Pedro Pablo
Róxas, a Filipino-Spanish businessman who consolidated ownership and led the company through crucial early
growth stages. When San Miguel acquired the Oriental Brewery and Ice Company in 1919, it greatly increased
its production capacity and market presence. By purchasing the Magnolia Ice Cream Plant in 1925, the company
expanded its business beyond brewing and entered the dairy and dessert industries, eventually establishing
Magnolia as a well-known brand in the Philippines. San Miguel's beverage portfolio and brand reach were
expanded when it obtained the exclusive rights to bottle and distribute Coca-Cola in the Philippines two years
later, in 1927. In 1938, the company started making its own glass bottles to increase independence and decrease
reliance on the supply chain, which enhanced its capacity for vertical integration. San Miguel took the first steps
toward becoming a regional player between 1935 and 1940 when it opened operations in Texas and managed cold
storage companies in Singapore and India. However, the Japanese occupation during World War II (1942–1945)
severely disrupted operations. The company started rehabilitation efforts soon after the war ended, despite the
fact that several plants were damaged or destroyed.
II. Post-War Diversification and Growth (1946 – 1980s)
San Miguel Corporation made major efforts to restore its operations and reestablish its presence in the
Philippine market after World War II. The company's first overseas production facility, a brewery in Hong Kong,
was established in 1948, marking a significant step toward internationalization. This action marked the start of its
plan to expand internationally. By starting B-MEG Feeds in 1953, San Miguel expanded into the agribusiness
sector and established one of the most reputable animal feed companies in the Philippines. Through this endeavor,
the business was able to support regional livestock industries and capitalize on the expanding agricultural sector.
By establishing Coca-Cola Bottlers Philippines, Inc. (CCBPI), a joint venture with The Coca-Cola Company, in
1981, the company further enhanced its beverage operations. By utilizing Coca-Cola's worldwide brand and San
Miguel's vast logistics and retail network in the nation, this partnership allowed San Miguel to increase its soft
drink bottling and distribution capabilities.
III. Globalization and Strategic Acquisitions (1990s – 2000s)
San Miguel Corporation (SMC) increased its influence both domestically and abroad in the 1990s and 2000s
by pursuing an aggressive globalization and acquisition strategy. SMC made a big move in 1997 when it merged
Coca-Cola Bottlers Philippines, Inc. (CCBPI) into Coca-Cola Amatil Limited, a Coca-Cola bottler with
headquarters in Australia. San Miguel gained greater access to the Asia-Pacific beverage market in return for a
25% equity stake in Amatil. But in 2001, SMC changed course and teamed up with The Coca-Cola Company to
buy back CCBPI, regaining a majority 65% stake. This action strengthened its control over the regional beverage
market by placing the bottling operations back under its direct supervision. In the same year, San Miguel expanded
its business by purchasing Pure Foods Corporation, a significant participant in the flour and processed meats
sectors. SMC became a leader in the Philippine food manufacturing industry as a result of this acquisition, which
greatly increased the company's food portfolio. In 2002, San Miguel purchased an 83% share in Cosmos Bottling
Corporation, the second-biggest soft drink company in the Philippines, through its majority-owned CCBPI.
Through this calculated acquisition, SMC was able to expand its consumer base and brand recognition while
solidifying its position as the nation's leading soft drink company. Ultimately, San Miguel sold The Coca-Cola
Company its 65% share in CCBPI for $590 million in 2007, ending its involvement in the Coca-Cola business.
Its direct involvement in Coca-Cola bottling came to an end with this divestment, which freed up funds and
enabled the company to reinvest in developing industries like infrastructure and energy.
IV. Diversification into New Sectors (2010s)
Beyond its conventional food and beverage operations, San Miguel Corporation (SMC) made a bold move
into the energy, infrastructure, and industrial sectors in the 2010s. The biggest oil refining and marketing business
in the Philippines, Petron Corporation, was purchased by SMC in 2010 for a majority stake. The company gained
a foothold in the nation's energy sector and control over a significant oil supply chain from refining to retail thanks
to this acquisition, which represented a significant strategic shift. By taking over the management and upkeep of
the South Luzon Expressway (SLEX) in 2012, SMC made an infrastructural expansion. By formally entering the
toll road and transportation industry, the conglomerate supported the development of national infrastructure and
expanded its role in logistics and mobility. By 2016, San Miguel had redirected its investments by pulling out of
the telecom sector. For $1.5 billion, it sold PLDT and Globe Telecom its telecom assets, including spectrum
holdings. The company was able to reallocate resources to higher-growth sectors like energy, cement, and
infrastructure as a result of this strategic exit. By paying $2.15 billion to acquire LafargeHolcim's Philippine
operations in 2019, SMC further broadened its industrial portfolio. Through this acquisition, San Miguel made a
substantial foray into the cement sector and established itself as a key participant in the nation's infrastructure and
construction supply chain.
V. Major Infrastructure Projects and Sustainability Initiatives (2019 onwards)
San Miguel Corporation (SMC) strengthened its position as a major force behind national development in
2019 by focusing more on environmental sustainability and large-scale infrastructure development. The $15
billion New Manila International Airport project, which SMC started in Bulakan, Bulacan, in 2019, aims to
decongest Ninoy Aquino International Airport (NAIA) and establish it as a contemporary aviation hub. The airport
is anticipated to greatly increase connectivity, economic growth, and employment in Central Luzon with its
planned capacity of 100 million passengers per year. The company finished the 4-kilometer South Luzon
Expressway (SLEX) Elevated Extension in 2022. This project connects Skyway to SLEX and helps to improve
traffic flow in southern Metro Manila. By easing traffic on one of the nation's busiest road corridors, this
infrastructure solution shortens travel times and boosts logistics effectiveness. By 2024, SMC had established the
first and biggest biodiversity offset program in the Philippines, "Saribuhay sa Dampalit," marking a significant
advancement in environmental stewardship. The project, which is located in Malabon, aims to preserve the
habitats of native species and restore mangrove forests. It emphasizes SMC's dedication to striking a balance
between long-term ecological sustainability and industrial development.

San Miguel Corporation, established in 1890, has transformed from a small brewery to one of Southeast Asia's
most diversified conglomerates. Its early ventures into dairy, soft drinks, and ice sectors laid the groundwork for
long-term success. SMC's resilience and commitment to infrastructure, sustainability, and national development
reflect the economic development of the Philippines and its ability to innovate while maintaining a strong
connection to its history.
 Business Decision Strategies and Rules
I. Product Development
San Miguel Corporation began in 1890 as a brewery and has since transformed into the Philippines’ largest
conglomerate, spanning food & beverage, packaging, energy, infrastructure, and more. Its core beer brand,
San Miguel Beer, still dominates 90% of the local beer market, but today, beverages account for roughly one-
third of its revenue. Over time SMC’s leaders have continuously expanded and adapted product lines – from
soft drinks and ice cream in the early 1900s to processed foods, dairy and packaging – and later into oil, power
and infrastructure. SMC’s diversification was driven by vertical integration and new consumer needs: for
example, after mastering beer production it opened a soft-drink plant in 1922 and an ice cream (Magnolia)
plant in 1925. By the 2000s its businesses included packaged foods (Purefoods Meats, Magnolia Dairy and
Spreads), nonalcoholic drinks, hard liquor, and broad packaging (glass, metal, plastic). In the 2010s SMC
deliberately shifted into high-growth, heavy industries, acquiring oil refining, power plants, mining and
infrastructure assets. As CEO Eduardo Cojuangco explained, the company’s strategy “of diversifying into
non-allied industries will help spur economic growth and secure its future”. By 2011 SMC had $943M
EBITDA (up 117% from 2010) largely due to new energy and infrastructure segments.
II. Market Expansion
Domestic: SMC’s market expansion has been both domestic, ensuring nationwide presence, and global,
targeting Asia-Pacific and beyond. Domestically, SMC built a highly developed logistics network: it reports
five breweries and hundreds of production sites serving 471,000 retail outlets across the Philippines. This
network underlies its market leadership in local beverages, snacks, and basic foods. In recent decades, SMC
has also moved into large-scale infrastructure at home. For instance, its subsidiary NNIC won the bid to build
and operate the 7.15‑km NAIA Expressway (linking Manila’s airport terminals to major expressways),
reflecting a strategy to improve key transport corridors. It is also constructing the New Manila International
Airport (Bulacan Aerocity), a 2,500‑hectare greenfield project, positioning SMC in domestic aviation
infrastructure.
International: Abroad, SMC first exported beer as early as 1914 and by mid-century set up breweries
overseas. Today it has over 100 major facilities in Asia-Pacific. Its brewery arm (SMB, 51% owned with
Kirin) is Asia’s 10th largest by volume, leading in the Philippines and Hong Kong and present in China,
Indonesia, Thailand, Vietnam, etc.. SMC reports exports to 60 countries, and in the 2000s it actively pursued
cross-border deals. In 2004 SMC announced it was studying acquisitions in the US and Australia to expand
beyond Asia. Already by 2003–2004, it had acquired a Thai brewery and a Vietnamese animal-feed business
as part of a regional growth plan. More recently, SMC entered regional energy markets: in 2011 it agreed to
buy ExxonMobil’s Malaysian refining and retail business (610‐station network and refinery). These moves,
joint ventures with Kirin (Japan), partnerships in Malaysia and beyond, illustrate SMC’s multi-pronged market
entry: it uses acquisitions, greenfield projects, and PPP bids to enter new sectors and geographies.
III. Mergers and Acquisitions
Throughout its history, SMC has used M&A to build scale and reposition itself. Key deals often reflect
deliberate strategy shifts. In the consumer era, SMC verticalized and consolidated food/beverage sectors: for
example, in 1987 it bought La Tondeña Distillers to enter spirits, and in 2001 it acquired Pure Foods to
dominate processed meats and dairy. Also in 2001 it teamed with Coca-Cola to reacquire Coke Bottlers
Philippines (trading away its 25% stake in Coca-Cola Amatil). In 2002 it added Cosmos and sold a 15% stake
to Kirin. By the 2000s, SMC’s portfolio of food and beverage brands was huge; it controlled roughly 90% of
PH carbonated drinks and margarine, 56–58% of hard liquor and powdered juice, etc. but beer and beverages
were only 33% of revenue.
In the late 2000s–2010s, under President Ramon Ang, SMC pivoted toward heavy industry. It divested
some consumer assets, notably selling National Foods of Australia for $2.6B in 2007 to free cash. It then
invested in energy and utilities. In late 2009 it bought a 27% stake in Manila Electric Co. or Meralco for
$607M, and one month later agreed to acquire 51% of Petron Corp. (the country’s largest oil refiner) from
Ashmore Group. Reuters noted these were “part of a long-standing plan to exit the food and beverage business
in favor of heavy industry”. In 2011, SMC also purchased ExxonMobil’s Malaysian downstream arm. These
M&A moves gave SMC integrated positions in fuels and power: Petron became the biggest PH refinery and
its Meralco stake added distribution reach. SMC’s infrastructure ambitions led it to win major PPP contracts:
beyond NAIA Expressway, it is part of consortiums for airports and power plants.
Overall, SMC has used M&A strategically to secure vertical integrations and diversification into new
sectors. It often formed strategic partnerships and split off businesses to focus on emerging opportunities. As
a result of these deals, SMC’s business mix has shifted dramatically over time, from nearly 100% beer in 1890
to only 30% beverages by the 2000s, with the rest in food, packaging, fuel, power, etc.
IV. Risk Management
SMC faces multiple risk types – financial leverage, operational disruptions, regulatory change and
environmental factors – and has taken steps to manage them. Financially, the company carries significant
debt to fund its capital projects, but credit agencies have generally maintained a stable outlook on its debt,
citing SMC’s diversified cash flows. The firm also employs treasury hedging, typical of conglomerates in
volatile sectors. In its latest reports, SMC states it has practiced risk management since the 1990s and is
formalizing an Enterprise Risk Management (ERM) framework (adopted by 2023) to “maximize
opportunities while maintaining risks at acceptable levels”.
A major planned risk-mitigation measure is diversification itself: by having businesses across utilities,
infrastructure and consumer staples, SMC can weather sector cycles. Nevertheless, certain exposures loom
large. The company explicitly identifies climate-related catastrophes as a key operational risk, noting that
extreme weather can disrupt its facilities and supply chains. Accordingly, SMC has begun integrating climate
targets and investing in resilient infrastructure.
Regulatory and political risk is also significant. SMC’s high-profile PPP projects have drawn legal
challenges. For example, in 2025 opponents filed a Supreme Court petition to void the government’s airport
PPP with SMC’s New NAIA Infra Corp. The government countered that the deal was properly bid and vetted
including ADB advice. SMC has had similar scrutiny in past decades, underscoring the need to navigate
changing regulations. In response, SMC maintains active compliance and government-relations teams. It
also builds buffer capacity so that unexpected delays or legal costs can be absorbed.
V. Corporate Social Responsibility
SMC integrates Corporate Social Responsibility into its strategy under the value of “malasakit”. Its social
arm, the San Miguel Foundation, has run hundreds of community projects in environmental stewardship,
livelihood, education, health and disaster relief. Rather than ad hoc charity, SMC emphasizes solving
systemic social issues: for instance, since 2012 it has invested over ₱1 billion in housing for families displaced
by Typhoons Sendong and Yolanda. In the COVID-19 pandemic, SMC donated roughly ₱530 million worth
of food and nearly ₱1 billion in medical supplies. The company stresses that its CSR efforts align with
national development. SMC has also undertaken major environmental initiatives. Under CEO Ramon Ang it
launched Better Rivers PH, a large-scale dredging and clean-up campaign for urban waterways. This
campaign removed hundreds of thousands of tons of silt and garbage from rivers in Metro Manila and
surrounding provinces. It dredged over 139,000 metric tons of waste from waterways around Ninoy Aquino
International. Observers note that aside from its immediate business interests, SMC has no direct commercial
stake in much of this work. Such projects both protect SMC’s existing investments and broadly benefit
communities.
 Strategic Direction and Future Plans (2021 – 2031)
I. Vision and Mission
San Miguel Corporation (SMC) is one of the Philippines' most seasoned and diversified conglomerates
with business interests in food and beverages, packaging, fuel and oil, energy, infrastructure, and banking.
SMC has evolved over the last century from a heritage brewer to a powerful multi-industry leader that is
instrumental in the economic growth of the Philippines. This change has been rooted firmly in a clear and
intentional strategic orientation guided by its vision, mission, long-term objectives, and sustainability
programs. Behind SMC's corporate philosophy lies its vision “A resilient and globally – competitive
Philippines where everyone can enrich and enjoy their lives.” This is not a wishful statement; it is a
declaration of San Miguel Corporation’s dedication to repeatedly raise its performance standards while
retaining its Filipino identity and values.
Complementing this is its mission, “San Miguel Foundation, Inc. is committed to the empowerment of San
Miguel host communities and various stakeholders by harnessing corporate social responsibility among the
various San Miguel businesses in pursuing mutually beneficial programs that lead to self-reliance and
sustainability.”. This mission highlights that the firm conceives of itself not merely as a profit-maximizing
entity, but rather as an institution with a social responsibility to support the long-term social and economic
well-being of the nation. Moreover, it underlines their devotion to prolonged societal impact and accountable
practices.
II. Current Long-Term Goals
The strategic objectives of the firm over the long term are broad and far-reaching. In its food and beverage
business, one of its core businesses, SMC continues to uphold market leadership through sustained product
innovation, aggressive market expansion, and regional growth throughout Southeast Asia. Aside from this,
the company is also diversifying its packaging business to cater to domestic and foreign customers in line
with the global trend towards sustainable and reusable materials.
More importantly, the company has made massive investments in infrastructure building, a move towards
high-impact, long-duration investments. Among its landmark projects is the New Manila International Airport
in Bulacan—a PHP 735 billion venture that, once built, will decongest Metro Manila, drive regional
development, and create millions of direct and indirect employment, according to a 2023 report from
BusinessWorld. The firm also aims to increase its toll road network via its affiliate SMC Infrastructure, for
improved mobility and trade.
Lastly, in the energy business, SMC Global Power Holdings Corporation has pledged to provide 2,500
megawatts of renewable power capacity by the year 2030 through solar, wind, hydroelectric, and battery
energy storage systems, as reported by SustainabilityReports.com in 2023. These investments are not only
aimed at securing the energy needs of the country but also to aid the national objective of diminishing
dependence on fossil fuels.
III. Sustainability Plans
Supporting its long-term business plan is San Miguel Corporation's wide-ranging sustainability agenda,
which demonstrates a conscious and science-driven strategy for addressing environmental and social issues.
The firm's 2023 Sustainability Report presents a number of quantifiable and time-bound goals, such as
reaching net-zero carbon emissions by 2050, creating a circular economy model by 2040, having a completely
sustainable and ethical supply chain by the same year, and helping to improve the lives of at least 15 million
Filipinos by 2030 through social investment initiatives.
 To achieve these goals, the company is presently undertaking several initiatives under its Climate Action
Strategy, such as the greenhouse gas inventory mapping, the use of energy efficiency technologies, and the
deployment of nature-based solutions like large-scale reforestation and river rehabilitation programs.
Furthermore, SMC is leading responsible water stewardship, and among its corporate aspirations is the
achievement of 50% water usage reduction across its entire facilities by 2025. This is being achieved through
a combined strategy of water recycling, utilizing alternate water sources such as rainwater and seawater, and
river system rehabilitation surrounding its facilities, as detailed by BizNewsAsia in 2024. These
environmental initiatives are supported by social initiatives that enhance education, livelihood, disaster risk
reduction, and access to healthcare in poor communities.
Another major innovation of San Miguel Corporation is the adoption of digital technologies, specifically
artificial intelligence (AI), to enhance efficiency and environmental performance. The firm is using AI systems
to track real-time energy usage, streamline logistics routes, and minimize production waste. These
applications are not only enhancing the operational efficiency of the company but also reducing its carbon
footprint and aligning business operations with international sustainability standards, as highlighted by Cash-
Platform.com in 2024.
In addition, the company has adopted the use of sustainability-linked financing tools, including green
bonds and sustainability bonds, to finance its renewable energy and infrastructure initiatives—thus promoting
transparency and accountability to shareholders and society. These strategic innovations reflect the
corporation's deep appreciation of the changing needs of a globalized economy, wherein long-term prosperity
is increasingly being tied to ethical and sustainable business practices.

Strategic Initiatives
I. Digital Transformation
In 2022, San Miguel Corporation launched San Miguel Mart, an online selling platform that utilizes an
online ordering system that improves product accessibility for their customers. SMC also gets acclaimed for
its digital advertising campaigns through its flagship brand, Ginebra San Miguel, winning the Catholic Mass
Media Award for Best Digital Ad from 2020 to 2022. As of 2022, in their domestic feed industry, six feed
mills have utilized robotic palletizers, which results in an improvement in terms of productivity, cycle times,
and wastage.
II. Global Expansion
a. San Miguel Aerocity Inc. (SMAI)
Through San Miguel Aerocity Inc. or SMAI, SMC is spearheading the development of the New
Manila International Airport (NMIA) located in Bulakan, Bulacan. Last September 2019, SMAI
signed a concession agreement with the Republic of the Philippines in the face of the Department of
Transportation to develop, construct, operate, and maintain the NMIA. It has a target capacity of 100
million passengers annually once complete. The NMIA is estimated to commence in the year 2025
with an estimated initial capacity of 35 million passengers yearly. It is a response to the Philippines’
urgent need to solve air traffic congestion and will provide safe, convenient, reliable, and efficient
services to Metro Manila, Central Luzon, CALABARZON, and their neighboring regions.
b. SMC MRT 7
SMC recently signed a fresh agreement with Korea Railroad Corporation (KORAIL) aiming to
smooth out the transition from construction to actual rail service of Metro Rail Transit Line 7 or MRT-
7. This is 22.8 kilometers long with 14 stations which aims to reduce travel time between Quezon City
 and San Jose del Monte, Bulacan. MRT 7 is expected to undergo testing in July, 2025 and is expected
to fully commerce in the year 2026.
c. San Miguel Foods
SMC, through its food division San Miguel Foods, in 2023 broke ground on its Davao Multi-Tier
Broiler Farm located in Hagonoy, Davao City aiming to build the first of 15 poultry mega plants in
the next 10 years. With a total land of 921 hectares, the farm will house 28 climate-controlled
farmhouses capable of producing 80 million birds annually, ensuring a sufficient supply of chicken
and bolster food for the entire Mindanao Region. This project will also help the development of the
region, eyeing to produce more than 1,000 jobs for the residents of Davao and support micro-enterprise
programs for farmers, their families, and, their communities. Within 2023-2028, San Miguel Foods
will also begin the construction with other priority mega plants located in Sison, Pangasinan, Lucanin,
Bataan, and lastly, Sariaya and Pagbilao in Quezon.
III. ESG Goals
a. San Miguel Corporation
During 2022, San Miguel Corporation (SMC) aims to establish a stand-alone Board Sustainability
Committee in the third quarter of 2023. The committee will be responsible for reviewing and
evaluating the ESG risks, and opportunities and ensuring sustainability to align with the company’s
long-term strategy. In July 2023, SMC successfully established the Board Sustainability Committee
which ensures the sustainable good governance of the company. The committee serves as the heart of
the aspirations of SMC such as the uplifting 15 million people by 2030.
SMC aims to uplift 15 million people by 2030 through equitable and transformative ways to create
a sustainable future for their employees, customers, communities, nation, and beyond. Currently, SMC
is investing in road infrastructures, transportation projects, industrial parks, ecozones, the Bulacan
Bulk Water Project, and lastly, investing in the livability of the community. SMC is also considering
some initiatives such as establishing an ESG knowledge platform, STEM education support,
developing future farmers and agri-leaders, and launching other training programs and scholarships
for higher education.
b. San Miguel Food and Beverage, Inc.
In the year 2022, the SMC, particularly San Miguel Food and Beverage, Inc. (SMFB) ensures full
compliance with the Republic Act No. 11898 or the Extended Producer Responsibility (EPR) Act of
2022. SMFB enforced a returnable glass bottle system that encourages the customers to return empty
bottles which will be subjected to thorough inspection and quality control protocols to ensure that it is
safe to reuse. Meanwhile, sludge and slop from wastewater treatment facilities, and manure from
SMF’s poultry and farms will be used as organic fertilizer. Lastly, metal scraps, plastic waste, and
other non-hazardous waste are sold to recyclers. With these systems, SMFB aims to recover and divert
at least 20% of its 2022 plastic packaging footprint by the end of 2023 and increase this annually up
to 80% by the year 2028.
c. San Miguel Global Power
Through its energy arm San Miguel Global Power Holdings Corporation (SMGP), SMC introduced
the Philippines’ first and Largest Battery Energy Storage System (BESS) located in Limay, Bataan.
With a total of 32 battery storage stations with 1000 megawatts (MW) power facilities, it is among the
largest integrated battery storage networks around the world. The BESS will support the aim of
generating 35% of energy from renewables by the year 2030 and 50% by the year 2040. It will support
the environmental advocacy of SMC since it will generate zero noise pollution, zero carbon emissions,
zero water extraction, and will generate no waste.
 Analysis of Success Factors and Key Decisions

STRENGTH WEAKNESSES

• SMC has a broad portfolio across recession- • Despite some exports, the bulk of SMC’s
resistant sectors. Its diversification program has sales and projects are Philippine-centric. This
successfully spread risk and tapped sectors exposes SMC to local economic cycles and
aligned with national growth. regulatory changes.
• SMC’s legacy beer and food brands are market • Several core segments are highly cyclical and
leaders in the Philippines. Its packaging arm is exposed to commodity price swings. In early
“the major source” of packaging for its 2025 SMC’s earnings fell 18% primarily due
businesses, and it serves customers in China, to a weak cement business and foreign-
Vietnam, Malaysia and beyond. Such vertical exchange losses. Volatile global prices can
integration and scale (45,000+ employees, 100+ squeeze margins.
facilities) create cost advantages.
• The massive infrastructure and energy
• With revenues of ~₱1.5 trillion (2022) and projects require heavy capital. This has led to
resources equivalent to ~4% of GDP, SMC has high debt levels. Creditors have viewed SMC
the financial muscle to undertake large projects. as heavily “loaded up on debt” for its “build,
Its strategic partnerships with companies like build, build” investments. In past years, SMC
Kirin, Hormel, Yamamura, Korea Water sold stakes to raise funds. High leverage
Resources, etc. grant access to global limits financial flexibility and heightens risk
technologies and markets. if project returns lag.
• SMC’s leadership under Ramon Ang and a • Philippine law mandates minimum public
strong management team is often cited as a core ownership in listed units. To comply, SMC
strength. Ang successfully pivoted SMC into had to sell a portion of its newly merged food
infrastructure and energy while maintaining its & beverage arm in 2018. Such rules can force
core businesses, and it is now “in every growth divestitures or slow down strategic
sector” of the country. The company’s culture of consolidations. Similarly, tax and
resilience and investment in human capital is environmental regulations impose ongoing
evidenced by its comprehensive COVID-19 costs and compliance burdens.
response (allocating ~₱11.7B to relief efforts
• SMC’s growth through acquisitions and spin-
and maintaining full pay).
offs can create integration headaches. Some
legacy businesses may lack modern
efficiencies. For example, some older
packaging and food facilities may require
upgrading.

OPPORTUNITIES THREATS

• The Philippine government’s push for • Large projects and utilities are subject to
infrastructure offers huge opportunities. SMC is government policy. Changes in
already a major player: it is building new administration or political climate can cause
expressways and the New Manila International delays or cancellations. Shifts in tax,
Airport. Continued infrastructure demand will
 allow SMC to leverage its project pipeline and environmental, or foreign investment rules
expertise. could affect project viability.
• Global climate goals and local energy needs • SMC faces both local and global competitors.
open new avenues. SMC aims for net-zero In beverages and food, it competes with
emissions by 2050. It has invested in cleaner global firms and regional players. In energy
power and is participating in a landmark $3.3B and infrastructure, it contends with
LNG infrastructure deal with Meralco and AboitizPower, Energy Development Corp.,
Aboitiz. It is also exploring renewables: e.g. the Metro Pacific, Ayala, and international
500 MW San Miguel Bay offshore wind project, investors. Aggressive competition could
now designated a national-energy priority. These pressure prices and margins.
moves tap global trends and government
• As a conglomerate with commodity-heavy
incentives.
operations, SMC is sensitive to global
• Rising incomes in Asia fuel demand for meat, economic shifts. A global recession or
dairy, processed foods, and beverages. SMC is prolonged inflation could hit sales. Currency
expanding its poultry, feeds, and processed meat fluctuations can also erode returns, especially
capacity to meet this demand. There is also as much of its debt is in USD.
scope to expand exports of its food and beverage
• Stricter climate and environmental standards
products to other ASEAN and Asia-Pacific
pose challenges, especially for SMC’s
markets .
remaining coal, cement and chemical
• SMC’s joint ventures with global firms provide facilities. Activist pressures could increase
technology access and new markets . Further costs or damage reputation. Climate change
collaborations in fintech or digital platforms itself can disrupt agriculture supply chains
could be pursued. Technological innovations in and infrastructure projects.
brewing, packaging or digital marketing also
• Events like pandemics or global trade
offer new growth.
tensions can disrupt SMC’s supply chains.
While SMC showed resilience in COVID by
vaccinating workers and aiding communities,
prolonged disruptions or logistics bottlenecks
could still pose risks to operations.

One of the most defining strategic decisions in San Miguel Corporation’s (SMC) history was its diversification
program launched in 2007. Recognizing that its traditional markets in food and beverage were becoming
saturated, SMC aggressively reallocated capital into new growth sectors such as power generation, fuel and oil,
and eventually infrastructure. This strategic pivot aimed to mitigate the impact of business cycles and reduce
dependence on a single industry, effectively transforming SMC from a consumer goods giant into a diversified
conglomerate.
A key milestone in this diversification was the acquisition of Petron Corporation in 2010. Seeing an opportunity
in the undervalued oil sector, SMC exercised its option to purchase 60% of SEA Refinery Corporation, giving it
a 68% controlling stake in Petron, the Philippines’ largest oil refiner and distributor. This move significantly
expanded SMC’s footprint in the energy sector and gave it control over a vital link in the country’s energy supply
chain.
 In 2018, SMC undertook a major corporate restructuring by merging its food and beverage subsidiaries (San
Miguel Pure Foods, San Miguel Brewery, and Ginebra San Miguel) into a single entity: San Miguel Food and
Beverage Inc. To comply with public ownership rules and to raise capital, SMC offered up to 20% of the merged
entity to the public through an initial public offering (IPO), amounting to around 1.2 billion shares. This not only
streamlined operations but also unlocked capital while consolidating the group’s stronghold in the food and
beverage sector.
Another transformative area of investment has been infrastructure development. Under the leadership of
Ramon Ang, SMC invested heavily in toll road expansion projects such as the Skyway and the South Luzon
Expressway (SLEX) and obtained government approval for new connectors like the NAIA express links. The
centerpiece of these efforts is the ambitious ₱740 billion New Manila International Airport in Bulacan, which
aims to become a major aviation hub. These long-term projects are expected to significantly diversify revenue
streams and contribute to national infrastructure development.
In parallel, SMC expanded further into the energy sector by establishing San Miguel Global Power in 2011.
This move led to a series of investments in coal, natural gas, and renewable energy projects. A key example is the
ongoing construction of a 1,313 MW combined-cycle gas plant in Batangas. In addition, SMC is participating in
a $3.3 billion consortium with Meralco and Aboitiz to develop an LNG terminal and gas plants. These energy
initiatives are designed to meet the Philippines’ growing power demand and align with global energy transition
trends.
Finally, during the COVID-19 pandemic, SMC made a significant pandemic-era pivot, focusing on employee
welfare and corporate social responsibility. The company allocated over ₱11.7 billion in pandemic relief,
maintained full pay for employees despite operational disruptions, and spent nearly ₱1 billion to vaccinate
approximately 70,000 workers. It also donated vaccines to public sectors, including 2,000 doses for Pasig jeepney
drivers. In parallel, SMC adjusted its operations to boost agri-food production, supporting food security at a time
of national crisis. These efforts not only demonstrated corporate resilience but also enhanced SMC’s public trust
and long-term goodwill.
References:
• San Miguel Corporation. (n.d.). Our History. https://www.sanmiguel.com.ph/page/our-history
• San Miguel Brewery. (2023). 125th Journey. https://www.sanmiguelbrewery.com/index.php/125th-
journey/
• FundingUniverse. (n.d.). San Miguel Corporation History. https://www.fundinguniverse.com/company-
histories/san-miguel-corporation-history/
• Reuters. (2010, July 26). San Miguel to buy $675 mln Petron stake from Ashmore.
https://www.reuters.com/article/business/autos-transportation/san-miguel-to-buy-675-mln-petron-stake-
from-ashmore-idUSMAN201276/
• FoodNavigator-Asia. (2011, August 23). Food giant San Miguel diversifies further.
https://www.foodnavigator-asia.com/Article/2011/08/23/Food-giant-San-Miguel-diversifies-further/
• MarketMonitor. (n.d.). San Miguel takes corporate social responsibility to new heights.
https://marketmonitor.com.ph/san-miguel-takes-corporate-social-responsibility-to-new-heights/
• San Miguel Corporation. (n.d.). Community engagement.
https://www.sanmiguel.com.ph/sustainability/kalinga/community-engagement/
• BusinessWorld | The most trusted source of Philippine business news and analysis. (n.d.).
https://www.bworldonline.com
• BizNewsAsia – The Largest Weekly News and Business Magazine. (2025). Biznewsasia.com.
https://www.biznewsasia.com
• Cash Platform. (2023). Cash Platform. https://www.cash-platform.com
• Download Sustainability Reports. (2025, February 15). SustainabilityReports.com.
https://www.sustainabilityreports.com
• San Miguel Corporation. (n.d.). Www.sanmiguel.com.ph. https://www.sanmiguel.com.ph
• SMC Sustainability. (n.d.). https://www.sanmiguel.com.ph/sustainability/kasaganahan/digital-
transformation/
• San Miguel Foods breaks ground for mega poultry plant in Davao to bolster food security. (2023, June
24). Sanmiguelfoods.com. https://www.sanmiguelfoods.com/san-miguel-foods-breaks-ground-for-mega-
poultry-plant-in-davao-to-bolster-food-security
• San Miguel Corporation. (n.d.). Your World Made Better. https://sanmiguel.com.ph/page/san-miguel-
aerocity-inc
• Guiao, M. A. (2025). MRT-7 to be Fully Operational by 2026 After Years of Delays. SPOT.PH.
https://www.spot.ph/newsfeatures/mobility/111574/mrt-7-will-be-fully-operational-by-2026-a5229-
20250423?s=to93sg8t7kk0g6j1id37o9nu98
• Tribdino, R. (2023, April 7). Largest battery energy storage facility up in northern Philippines.
CleanTechnica. https://cleantechnica.com/2023/04/07/largest-battery-energy-storage-facility-up-in-
northern-philippines/#google_vignette
• SustainabilityReports.com. (2022, January 1). San Miguel Corporation 2022 Sustainability Report –
SustainabilityReports.com. https://sustainabilityreports.com/reports/san-miguel-corporation-2022-
sustainability-report-pdf/
• SustainabilityReports.com. (2023, January 1). San Miguel Corporation 2023 Sustainability Report –
SustainabilityReports.com. https://sustainabilityreports.com/reports/san-miguel-corporation-2023-
sustainability-report-pdf/
• ABS-CBN News. (2021, February 23). San Miguel to vaccinate all employees vs COVID-19 for free.
https://news.abs-cbn.com/business/02/23/21/san-miguel-to-vaccinate-all-employees-vs-covid-19-for-
free
• BusinessWorld. (2021, March 10). San Miguel Corporation’s major infrastructure and energy projects.
https://www.bworldonline.com/corporate/2021/03/10/348293/smc-to-pour-more-investments-into-
infrastructure-energy/
• Datamonitor. (2009, September 14). San Miguel Corporation SWOT analysis. Business Source Premier.

• Inquirer.net. (2020, July 15). SMC’s 66,000 workers get full pay during lockdown.
https://business.inquirer.net/295765/as-smcs-66000-workers-get-full-pay-ramon-ang-says-dont-worry-
about-your-jobs
• Inquirer.net. (2023, October 4). SMC ramps up Bulacan airport project.
https://business.inquirer.net/476722/supply-chain-woes-push-back-bulacan-airport-completion-to-28
• Philippine Daily Inquirer. (2020, July 15). San Miguel allocates P11.7B for COVID-19 response.
https://newsinfo.inquirer.net/1319733/smc-allocates-p11-7b-for-covid-19-response
• Philstar. (2010, December 17). San Miguel hikes Petron stake to 68%.
https://www.philstar.com/business/2010/12/17/639512/san-miguel-hikes-petron-stake-68
• San Miguel Corporation. (2022). Annual Report 2022. https://www.sanmiguel.com.ph
• San Miguel Corporation. (2023). Integrated Report. https://www.sanmiguel.com.ph/article/integrated-
reports
• San Miguel Corporation. (n.d.). Corporate Profile. https://www.sanmiguel.com.ph/page/corporate-profile