Tuesday, September 05, 2006

Misamis Oriental New Battleground of RP "Liquor War"

CAGAYAN DE ORO CITY (MIKE BAÑOS / Sep 3) - The "Liquor War" for control of the country's alcohol market has found a new battleground in the province of Misamis Oriental.

Bitter corporate rivals Tanduay Distillers Inc. (Tanduay) and Ginebra San Miguel Inc. (GSMI) are both putting up new plants in this Northern Mindanao province to consolidate their forces for control of the lucrative hard liquor market in the Visayas and Mindanao, as well as nearby markets in Asean.

GSMI drew first blood when it took an option for 30 hectares of the Phividec Industrial Estate in Misamis Oriental on August 27, 2004. Company sources said a P1.4-billion alcohol distillery with a capacity of 75,000 liters of hard liquor a day will be built on what will eventually be a 100-hectare property.

SMC said production from the distillery will primarily be used to support its export operations. GSMI is 79.6-percent owned by food and beverage conglomerate San Miguel Corp.

Ginebra San Miguel, Inc. (GSMI) is a diversified alcohol-based beverage company owned by San Miguel Corporation . Originally known as La Tondeňa Distilleries, Inc., it was founded by the late Carlos Palanca, its main products are basically hard liquor.

It claims to be the largest producer and distributor of alcoholic beverages in the Philippines. In each of its product categories, Ginebra San Miguel is the market leader, with over 70% share of the gin market.

The company supports these brands through a nationwide distribution network that includes 500 beer distributors owned by San Miguel Corporation, a leading multinational in Asia that is the largest food and beverage producer in the Philippines.(orchidasia.com)

GSMI said its net income fell 40 percent to P331.9 million in the first half, from P552.8 million in the same period last year.

But Tanduay now appears to have taken the initiative from GSMI when taipan Lucio Tan announced Saturday at the 15th Mindanao Business Conference in Zamboanga City that the wholly-owned subsidiary of Tanduay Holdings, Inc. has already started construction for a P1-billion Tanduay factory besides Asia Brewery Inc.'s existing brewery in El Salvador, Misamis Oriental.

"Seeing the great potential in Mindanao as a growth area, we are expanding our presence here by investing P1 billion for Tanduay's facility beside Asia Brewery's plant and another P250-million for a soft drinks facility also in Cagayan de Oro," Tan said.

The tycoon said the liquor facility would be one of his company's biggest investments in Mindanao. "Our group's (Lucio Tan Group of Companies) biggest exposure in Mindanao is the state-of-the-art brewing facility of Asia Brewery, Inc. (ABI) in Cagayan de Oro, and it is the first brewery to invest in Mindanao," he said.

What Tan was referring to was actually the ABI brewery in the town of El Salvador, some 20 kilometers west of Cagayan de Oro City in Misamis Oriental and the first ever brewery in Mindanao.

Rated to produce approximately 2 million hectoliters of beer per annum, the brewery boasts of fully computerized state-of-the-art brewing facilities and fills ABI's need to supply the growing demand for its products in Mindanao and the Visayas.

The new Tanduay plant will produce 400,000 cases of rum a month, which together with its other plants in Manila, Laguna and Bacolod , would give Tanduay a combined monthly output of 1.3 million cases.

The new facility will be constructed on a two hectares lot within the ABI complex in El Salvador and would include a warehouse, packing facility, distillery and aging plant. It will be built in a year with mostly internally generated funds.

Sources from the ABI plant in El Salvador conform construction has already been going on for two months on the Tanduay plant as well as an adjacent factory for ABI's Absolute Pure Distilled Drinking Water.

Absolute goes through state-of-the-art distillation process employing vapor compression and ozonation and is the first bottled water company to receive NSF certification.

However, there is still no company information available on when construction would start for a P250-million soft drinks factory (also announced by Tan) which will reportedly manufacture the branded Virgin Cola within the same ABI complex.

Misamis Oriental Governor Oscar Moreno welcomed the entry of the two rival liquor companies in the province and believes the intense competition between the two firms would serve as a catalyst for further growth and development in the region.

"We would like to stress laissez faire or free enterprise in Misamis Oriental, and allow the investor to go about his businessman with a minimum of interference but maximum support from local government," Moreno said.

Besides the ABI brewery and the upcoming Tanduay, Absolute, Virgin Cola and GSMI plants, Misamis Oriental also hosts other fruit and other beverage plants in Cagayan de Oro City like Coca-Cola, Pepsi Cola, Nature's Spring and Del Monte.

" mike_banos_2000@yahoo.comalternate email : mike_banos@walla.com >Link

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