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San Miguel’s doing-good business

"Food is about survival. Water is about quality of life. Infrastructure is about enjoying that quality life."

 

San Miguel Corp. invests heavily in corporate social responsibility projects and sustainability. If not too many people know about it, it’s probably because SMC vice chairman, president and COO Ramon S. Ang, prefers to do it that way—with little fanfare and publicity.

The amounts involved are not mere stunts. SMC spent P2.1 billion to build 8,000 homes for typhoon victims of Mindanao. It is spending P1 billion just to dredge the Tullahan River in Malabon.

San Miguel phased out its profitable plastic bottle business so as not to contribute to pollution. What people call global warming. Or climate change. Relatedly, the company has pledged to cut water use by half, by 2025. Achievement is two years ahead of schedule. In 2018, SMC saved 8.84 million cubic meters of water—enough to supply nearly 300,000 homes. Additionally, San Miguel has planted one million trees.

To me, San Miguel’s best and biggest doing-good business is how it prices its products and services very reasonably.

SanMig beer is a monopoly product. It has more than 90 percent of the market. Yet, SanMig is one of the cheapest quality beers you can drink anywhere in this world.

SMC is the biggest power producer in Luzon, with more than 4,000 megawatts generating capacity. Yet, it prices its electricity at less than P3 per kwh, one-fourth the price of the biggest retailer on the island.

San Miguel also will be the biggest producer of water in Luzon. Ramon Ang promises to deliver to households the cheapest, cleanest potable water there is. For a start, the company will provide cheap water 24/7 to 24 water districts of Bulacan. It wants to produce water up to 3,800 million liters a day at a cost of P35 billion.

San Miguel is the biggest producer of foods in the Philippines, processed foods like chicken, hotdogs, spam. Magnolia fresh chickens are at least 10 percent cheaper than its rivals in supermarkets. Yet, the quality of Magnolia chickens is far different from other chickens. There is no residue, which could be harmful to one’s health.

SMC is moving into the rice business in a big way. It plans to import palay, not rice, by the thousands of tonnage, store them in huge silos with stringent temperature control (palay usually has 40 percent moisture), then process the palay into high-grade rice. The resulting by-products or waste is converted into feeds and fuel. The result: 100 percent recovery. Little or no waste. You get quality rice—cheap. Ang promises to plough back rice profits by supporting farmers, with seedlings, technical help, even money.

San Miguel has opened a 1,000-sqm feeding center for Tondo’s poor to help beat hunger and malnutrition. Children, single mothers, the disabled, the elderly can walk in anytime for a pack of a hearty, nutritious meal.

San Miguel offers at least three million meals every year. That’s like feeding, for free, more than 4,000 people a day, assuming each person gets two packs a day. “We are spending good money here,” says Ramon Ang. Indeed, assuming P30 per meal, three-million meals is P90 million a year. Plus the cost of running the operation for what, may be, forever.

The meals consist of pre-packed balanced meals and donations of unused, surplus food from restaurants, fastfood chains and convenience stores. Right away, two issues are addressed—waste and hunger.

Mayor Joseph Estrada keeps saying? “A hungry stomach knows no law.” So a third issue is addressed—crime.

Ramon Ang frames his doing-good business in terms of security. Food security. Water security. He adds a third—infrastructure security. Food to eat. Water to drink. Roads, rails, and airports (Boracay, and soon Bulacan) for you to commute to work or do business.

Ang calls it “creating an impact on important social, economic, and environmental issues.”

Food is 50 percent of household spending, especially by the poor. About 60 percent of communicable diseases, which afflict the poor, are water-borne. Food is about survival. Water is about quality of life. Infrastructure is about enjoying that quality life.

Infrastructure is a mind-boggling business. San Miguel is No. 1, being the owner or operator of 55 percent of tollroads, mainly the highways south and north of Manila and beyond.

They include the multi-level 51-km South Luzon Expressway, from Paco, in Manila, to Santo Tomas in Batangas. SLEX connects the business districts of Manila and Makati to the heartland of the Philippines’ industrial hub, booming Calabarzon.

SLEX will be connected by a connector road from Magallanes Exit in Makati to Balintawak, at the entrance to the North Luzon Expressway and TPLEX. SLEX will also be extended by 61 kms, from Santo Tomas, Batangas (and Calamba, Laguna) to Lucena City in Quezon province.

San Miguel has just about completed the 88.5-km Tarlac Pangasinan La Union Expressway (TPLEX), from Tarlac to Rosario, La Union. Even then says. Ang, “we are already gearing up for extension, from Rosario to San Juan, La Union.” In effect, San Miguel has connected both ends of Luzon.

To produce cheaply, cement (a major component of infra), San Miguel has bought Holcim’s local cement business, valued at $2.1 billion. This will bring down the cost of cement and spur President Duterte’s P9-trillion “Build, Build, Build” program.

Also, San Miguel will build roads—using recycled plastic waste. It also produces glass, 97 percent of which is recycled glass.

But the biggest boon is yet to come—a $14-billion San Miguel Airport in Bulacan. It will have four runways, contribute P1 trillion to GDP, and employ up to 40 million directly and indirectly, assuming 20-million arrivals and each arrival attended to by two Filipinos.

Now, if only the government could rush the airport’s approval. Had the unlamented Aquino administration the first time Ramon Ang proposed it to the government in 2014, we would not have had to endure the colossal traffic in the air, at the runways, and on land, at the terrible three terminals of NAIA.

Costing $14 billion, the airport will not cost a single centavo to the government and yet, the government will be its biggest beneficiary. In fact, it will make Duterte a great president, overnight.

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Topics: Tony Lopez , San Miguel Corp. , Ramon S. Ang
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