San Miguel

Corporation

About The Company

 Established in 1890 as a single-product brewery, San Miguel Corporation (San Miguel) is
the Philippines’ largest beverage, food and
packaging company. Today, the company has
over 100 facilities in the Phili ppines, Southeast
Asia, and China.

One of the country’s premier business

conglomerates, San Miguel’s extensive product
portfolio includes over 400 products ranging
from beer, hard liquor, juices, basic and processed meats, poultry, dairy products, condiments,
coffee, flour, animal feeds and various packaging products.

For generations, the Company has generated strong consumer loyalty through brands
that are among the most formidable in the Philippine food and beverage industry - San Miguel
Pale Pilsen, Ginebra, Monterey, Magnolia, and Purefoods. Flagship product, San Miguel Beer,
holds an over 95% share of the Philippine beer market.

In addition to its leadership in the Philippine food and beverage industry, San Miguel has
established a significant presence overseas. The Company’s operations extend beyond its home
base of the Philippines to China (including Hong Kong), Vietnam, Indonesia, Malaysia, Thailand
and Australia.

Through strategic partnerships it has forged with major international companies, San
Miguel has gained access to managerial expertise, international practices and advanced
technology, thereby enhancing its performance and establishing itself as a world-class
company.

San Miguel’s partners are world leaders in their respective businesses. Kirin Brewery
Co., Ltd. is a major shareholder of San Miguel Brewery. The Company also has successful joint
venture relationships with US-based Hormel Foods Corporation, Nihon Yamamura Glass and
QTel, a telecommunications company in Qatar.
 In the Philippines, San Miguel’s corporate strategy is at aimed capitalizing on new
growth markets through acquisitions and further enhancing its competitive position by
improving synergies across existing operational lines.

While the company has significantly expanded its participation in its core business of
food, beverage and packaging through regional acquisitions and integration, it has also
exploring entry into heavy industry such as power and other utilities, mining, energy, toll ways
and airports.

Vision
Making Everyday Life A Celebration

San Miguel will be among the largest food, beverage and packaging companies in the
Asia-Pacific. We will carry into new markets our over a century-old tradition of quality and
integrity. Consumers will take pleasure in reaching for our products and services because they
are the best value for money. Our food and beverage brands will be in every household and
every retail outlet. We will meet our consumers’ everyday needs, delighting their every taste.
Through our products and services, every occasion to drink and eat will bring enjoyment . . . a
celebration

To take the lead in realizing San Miguel Corporation’s commitment to social

development in the Company’s effort to contribute towards the improvement of life in the
communities in which it operates and the public it serves.

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.

Goals
 San Miguel Foundation, Inc. will initiate, manage and support social development
initiatives that:

Promote education to youth from low income families through scholarships, literacy
classes and support programs like supplemental feeding, book donations, etc. Strengthen
communities through capability building activities and the provision of basic social services;
Support local enterprises that bring livelihood opportunities to community groups, dependents,
San Miguel retirees and other stakeholders; Provide assistance to disaster-stricken communities
through relief and rehabilitation programs; and protect, preserve and regenerate the
environment.

Our Core Values

Passion for Success

We will constantly strive for excellence. We will be the best we can be and create value
in everything we do. We will be proactive and entrepreneurial, propelled by a sense of urgency,
competitiveness and total dedication to results. 

Teamwork
With trust and respect for each other and with unity and purpose, we will work toward
our shared aspirations, transcending boundaries along functional and organizational lines. 

Respect For Our People

We recognize our employees as individuals and are committed to nurturing their
individual capabilities. We will uplift the dignity of labor by encouraging our people to be the
best in their fields. We are committed to creating a work environment that encourages open
communication, camaraderie and professional growth. 

Customer Focus
 We will be our customers’ preferred choice. They will choose our products and services
above others because we provide them with products and services that exceed their
expectations. 

Innovativeness
We will encourage creativity and ingenuity in our processes and systems, products and
services. We will be forever looking for ways to outdo ourselves, always striving to be the first
to anticipate consumer needs and deliver something better. 

Integrity
In the conduct of our business, we will be guided by what is ethical, fair and right. We
believe in profit with honor and are committed to good governance and the highest moral
standards. 

Social Responsibility
We believe social responsibility and corporate citizenship are integral parts of our
business. We are committed to improving lives of people in the communities where we live and
work.

History

Established in 1890, La Fabrica de Cerveza de San Miguel, Southeast Asia's first brewery
produced and bottled what would eventually become one of the best selling beers in the
region. Within the span of a generation, San Miguel Beer would become an icon among beer
drinkers.
By 1914, San Miguel Beer was being exported from its headquarters in Manila to
Shanghai, Hong Kong and Guam. A pioneer in Asia, San Miguel established a brewery in Hong
Kong in 1948, the first local brewer in the crown colony.
 Today, San Miguel Beer - the Company's flagship product - is one of the largest selling
beers and among the top 10 beer brands in the world. While brewing beer is the company's
heritage, San Miguel subsequently branched out into the food and packaging businesses.

From the original cerveza that first rolled off the bottling line, San Miguel Corporation
has since diversified to produce a wide range of popular beverage, food and packaging products
which have for over a century catered to generations of consumers' ever changing tastes.

The Company's manufacturing operations extend beyond the Philippines to Hong Kong,
China, Indonesia, Vietnam, Thailand and Malaysia. Its products are exported to major markets
around the world. Continuing a tradition of product quality, San Miguel is capitalizing on its
unique strengths in brands and distribution to weave its products more deeply into the fabric of
everyday life. Not just in the Philippines but in the Asia-Pacific region.

San Miguel's partnerships with major international companies have given the Company
access to the latest technologies and skills. Our marketplace experience, technical expertise,
and innovation capabilities, while largely homegrown, also reflect our long term partnerships
with world class players.

San Miguel's joint venture partners include Hormel Foods Corporation, Yamamura Glass
and Fuso Machine and Mold Manufacturing of Japan. A strategic equity investment in San
Miguel by Japan's leading brewer and global player, Kirin Brewery Company, Ltd. has further
enhanced San Miguel's competitive position in Asia, a region in which it is already well placed.

Board of Directors

Eduardo M. Cojuangco, Jr.  Estelito P. Mendoza 

Chairman and CEO  Member of the Board
          
Ramon S. Ang       Iñigo Zobel                        
President and COO Member of the Board
             
Winston F. Garcia    Member of the Board (independent
Member of the Board (independent director)
director)
Roberto V. Ongpin  
Menardo R. Jimenez  Member of the Board
Member of the Board
Alexander J. Poblador  
Leo S. Alvez                   Member of the Board
Member of the Board
Ferdinand K. Constantino 
Reynato S. Puno              Member of the Board
Member of the Board
Joselito D. Campos, Jr. 
Hector L. Hofileña     Member of the Board
Member of the Board
Eric O. Recto   
       
Member of the Board
Carmelo L. Santiago 

The San Miguel Foundation Team

CAMILLE B. BUENAVENTURA WESLEY A. BRIOLA

Executive Director Program Officer

JENNIFER E. RODRIGUEZ RONA MEI Y. TANCHICO

Program Officer Administrative Assistant
Corporate Structure

Products and
Services

BEVERAGES
Our flagship product, San Miguel Beer shares shelf-space with world-renowned Ginebra
San Miguel gin, and a slew of fresh-off-the line health teas and fruit juices.
 San Miguel Beer Pale Pilsen
 San Miguel Premium All-Malt Beer
 San Miguel Super Dry
  Cerveza Negra (San Miguel Dark Beer)
 San Mig Strong Ice

FOOD
The extensive portfolio of high-quality and great-tasting food
products continues to delight consumers in more than 60 different
markets.

Agro-Industrial
 Monterey Meats
 Magnolia Chicken
 B-MEG Animal & Aquatic
Feeds
 San Miguel Animal Health Care

Value-added Meats

 Refrigerated meats
 Grocery products

Integrated Milling
  Flour Milling
 Hard Wheat Flour (Emperor Premium Bread Flour, Pacific Hard Wheat Flour,
Emperor Hard Wheat Flour, King Hard Wheat Flour, Monarch Hard Wheat Flour,
Count Hard Wheat Flour)
 Soft Wheat Flour( Queen Soft Flour, Countess Soft Wheat Flour)
 Specialty Flour (Baron All-Purpose Flour, Baron Siopao Flour, Princess Cake Flour,
Duchess Cake Flour, Golden Wheat Whole Wheat Flour (Coarse & Fine), Golden
Wheat Whole Wheat Flour (Complete))
 Customized Flour(Harina de Pan de Sal, Royal Premium Noodle Flour, Prince
Noodle Flour,Prince Wrapper Flour,Nutri Flour High Gluten Flour)

 Premixes
 Mix n Bake ( Brownie Mix, Cookie Mix, Crinkle Mix, Muffin Mix, Pizza Mix, Bread
Mix, Mix n Fry, Pancake & Waffle Mix, Yeast-Raised Doughnut Mix, Mix ‘n Steam,
Siopao Mix, Puto Mix)
 Bakery Ingredients (Zuprim Bread Improver, Bake Best Baking Powder)
 Services (Product Customization, Recipe Development, Technical Training in
Baking)
 Premixes(Magnolia Pancake Plus with Syrup (Maple, Chocolate,
Strawberry),Magnolia Pancake & Waffle Mix (500g and 200g))

Dairy, Oils and Fats       

 Butter, Margarine &

Cheese( Dari creme, Magnolia
Cheezee)
 Gel-Based Snacks and Desserts

 Milk
 Specialty Oils
 Magnolia Ice Cream

  Coffee
  San Mig Coffee Instant 3-in-1 Regular Coffeemix
 San Mig Coffee Instant 3-in-1 Sugar-Free Coffeemix
 San Mig Coffee Instant 2-in-1 Regular Coffeemix
 San Mig Coffee Instant 2-in-1 Sugar-Free Coffeemix
 San Mig Coffee Pro-Health
 San Mig Coffee Pro-Beauty
 San Mig Coffee Pro-Fiber
 San Mig Coffee Pro-Power
 San Mig Coffee Pro-Slim
 San Mig Coffee 100% Premium Instant Coffee
 Grandeur Premium Flavored Coffee Blend

Services    

 Customization
 Menu & Recipe Development
 Packaging Development
 Food Safety Trainings and
Consultancy
 Quality Assurance Services
 Food Laboratory Analysis
 Marketing Services and Promotional Tie-Ups

Packaging
 SMC’s local and international clients rely on its ability to provide dynamic, intuitive
packaging solutions anchored on more than 60 years of solid industry leadership.

GLASS

 Excellent in protecting products from contaminants, preserving flavor and 

freshness, as well as ensuring desired shelf life

 With its broad spectrum of shapes, sizes and even colors, glass offers more 
flexibility in design.

 100% recyclable and reliable, the container is a truly environment-responsive 

and cost-effective packaging material.

 Being chemically inert, transparent, and resealable make the glass container a popular
choice as an attractive and image-enhancing solution to displaying, preserving, and
transporting products.

PLASTICS

Rigid Plastic Containers, plastic crates and pallets offer a better alternative to handling and
storage requirements of beverage, food, poultry and fish, fresh produce, and industrial
applications because of the following reasons:

 Durability and easy-to-stack features

 Economical – no need for costly and time-consuming repairs

 Consistency in quality

 Increases worker safety and load protection

 Hygienic

 Marketing appeal

 Durable

 Reusable

 Recyclable
  Chemical and weather resistant

 No need for fumigation

METALS

 Metal closures are primary packaging materials, which come into contact with the
customer’s product. 

 Properly applied metal closures seal in the contents of a container to prevent spillage, to
preserve product freshness and to maintain product integrity by preventing
contamination & tampering. 

 It also enhances the aesthetic appeal of the product brand. 

COMPOSITES
Composite Packaging is made of laminated thin layers of various plastic films
and aluminum foil or paper. It is offered in a wide spectrum of sizes, shapes, materials,
structure, and colors.

 Promotes product flexibility and affordability because of its lightweight and multi-
purpose format. It is popularly used in the retail industry. 

 Improves branding and merchandising value of a product.

PAPER/CARTONS

 Corrugated boxes play an important role in many different industries. From consumer

products to industrial applications, boxes are needed to package, protect and transport
products. 

 About 90% of all industrial and consumer products are packed and shipped using
corrugated boxes. 

 There are many styles and structures of corrugated boxes depending on the customers’
needs.
PET

Advantages

 Lightweight: Convenient, easy to carry

 Safe

o US FDA approved for direct food contact

o Durable and resistant

o Shatter proof (limited line/distribution breakages)

 Transparent/Clear: Enhances brand/product image

 Good barrier

o Maintains product integrity especially with  proper trade handling 

o Low permeability to oxygen, carbon dioxide and water; 

o Higher/Multi barrier formulation 

 Environment Friendly

o 100% Recycable

 Cost efficient (Total Systems Cost)

o Lighter weight cost

o Less wastages/ breakages (production line/trade)

o No retrieval , segregation and washing cost

Benefits of recycled flakes

 Reduces Carbon Footprint

o Every kilo (kg) of recycled Polyethylene Therephthalate used saves 9.4 kWh of
primary energy

o At full utilization, saves enough primary energy to power 12,000 homes

for one (1) month
 o Reduces CO2 emissions by 10,000 MT annual

o At full utilization, has the same effect as removing 2,100 cars from the road

 Reduces need for virgin resin

 Enhances the company’s corporate citizenship

 Increased marketability of products that can claim - package is made from “100%
Recycled Materials”

MOLDS

Glass Container Molds

15ml to 1.25 Liters

 Complete Design/Manufacture of BB & PB molds and components

 Manufacture/Supply of NNPB molds & components

 Major materials : Grey Cast Iron; Silicon/Aluminum Bronze (minox)

Other Products

 Plastic Molds

o Plastic Crate Mold

o Pallet Mold

o Tub and Lid  

 Precision Machine Parts

o Design/Manufacture

o Material Selection

Materials
  Cast Iron

o Aluminum Bronze

o Round Bar

OTHER PACKAGING PRODUCTS

Cork Solutions

 Cork Solution for still wine

 Cork Solution for sparkling wine

 Cork Stopper Solutions

General Packaging

 Stretch Film

 Pallet Caps

 Invoice Enclosed Envelopes

 Packaging Tape

 Tape Dispensers

 Strapping

OTHER BUSINESS

 Bell Telecommunications (BellTel)

 Eastern Communications (ETPI/Eastern Telecom)
 Liberty Telecoms Holdings Inc. (39.3% ownership)
 Wi-tribe Philippines (partnership with Qtel)

 Anchor Insurance Brokerage Corp.

 Floro International Corporation
 SMC Stock Transfer Service Corp.
 SMITS Inc.
 San Miguel Holdings Inc.
 San Miguel Shipping & Lighterage Corp.
 ArchEn Technologies Inc.
 Bank of Commerce (34.3% ownership)
 Manila Electric Company (MERALCO) (27% ownership)
 Radio Philippines Network
 Intercontinental Broadcasting Corporation

Corporate Governance

In the business milieu, social responsibility is becoming an important investment factor.

Better access to capital is often granted to corporations with a strong social responsibility
performance. It also puts these firms in a position to attract strategic partners, paving the way
to gaining higher investment returns. Investors worldwide put a premium on social
responsibility as a strategic business component.

Corporate governance and social responsibility directions have dovetailed in recent

years. More shareholders view how corporations manage social responsibility concerns with
growing confidence. This stresses the vital role of the Board of Directors and management in
effectively institutionalizing social responsibility.

There is a visible manifestation of social responsibility in the corporate governance

policies and practices of San Miguel Corporation. All publicly listed companies of the San Miguel
Group are in full compliance with the Securities and Exchange Commission’s rules and
regulations. SMC was the first company to submit a Corporate Governance Manual to the SEC
with the intention of institutionalizing the principles of good corporate governance throughout
its organization.
Compliance System

In adherence to corporate principles and best practices, the Chairman of the Board
designated a Compliance Officer reporting directly to him. As the position denotes, he is
responsible for seeing to it that the organization complies with the provisions in the manual.

The Board of Directors is responsible for the long-term success of the Corporation and
its sustained competitiveness, consistent with its trusted role exercised in the best interest of
the Corporation, its shareholders and other stakeholders.

Forming working committees within the Board fosters open discussion, keeping Board
members informed, and allowing them to become more sensitive to shareholders’ interests.

Audit Committee

This committee ensures that the accounting and auditing processes, practices and
methodologies meet international standards. It develops a definitive timetable within which the
accounting system of the Corporation is 100% compliant with the International Accounting
Standards (IAS). It includes an accountability statement to identify specific officers and
personnel who are directly responsible for accomplishing such task.

Financial records conform to accounting principles generally accepted in the Philippines.

Upon its approval, the Corporation will adopt the IAS as its main accounting and financial
reporting platform for international acceptability. The Audit Committee promotes a transparent
financial management system which strengthens the integrity of internal controls within the
Corporation.

An External Auditor is selected and appointed by the stockholders upon the

recommendation of the Audit Committee. To ensure an environment of good corporate
governance, the External Auditor or the handling partner is changed every five years or earlier.
 The Corporation has in place an independent internal audit function performed by an
Internal Auditor, who ensures that its key organizational and procedural controls are effective,
appropriate and complied with.

Disclosure System

All material information is publicly disclosed. These include earning results, Board
changes, and shareholdings of directors.

The Corporation established an Investor Relations Unit to disseminate timely

information to shareholders. SMC practices consistency, accuracy and timeliness in the delivery
and communication of information and data. The Unit coordinates with the Compliance Officer
and other SMC divisions in effectively communicating with stakeholders.

Monitoring and Assessment

Each committee reports to the Board of Directors. The Compliance Officer established
an evaluation system to determine and measure compliance against the manual’s guidelines.

Corporate Social Responsibility

Doing Well, Doing Good

A Commitment to Social Responsibility Social issues permeates almost all aspects of

business. How a corporation manages such issues has much to do with how seriously it takes its
social responsibility to heart.

Today, it is not enough to claim leadership as a profitable business. Good companies are
also good citizens and proactively assist communities where they do business.

The San Miguel Group's corporate citizenship goes beyond its commitment to its
consumers, employees, and key stakeholders in government and the communities where it
operates. Past and current programs focus on specific projects where it makes a difference.
 Doing business is about having a harmonious and long-lasting relationship with
customers.

San Miguel Corporation's overriding objective as a corporate citizen is to make a positive

contribution to the well-being of its stakeholders and to the economic, social and
environmental sustainability of the communities where it operates. Through its various
business groups and its social development arm, the San Miguel Foundation, Inc., the
Corporation implements projects nationwide. 

Corporate Social Responsibility extends this relationship to other stakeholders such as

the communities where these corporations operate. It is no longer the battle cry of
corporations to simply make profit for its stockholders.

Now, more than ever, corporations are guided by values from which it bases its every
business decision.

For San Miguel Corporation, integrity, teamwork, respect for others and social
responsibility are just a few of its corporate values that guide them everyday. Through its
corporate social responsibility arm, San Miguel Foundation Incorporated, San Miguel
Corporation proactively reaches out to others to bring forth change that will enable
communities to live better lives.

San Miguel Foundation, Inc. has crafted various programs and projects that address
contemporary issues on livelihood, health, education, the environment and disaster relief
following its overall direction of Enterprise, Education and the Environment.

Community Service
Customer Care Center

By setting up this Center, SMC re-affirms its responsibility to its customers.

Advancements in information technology make it possible for the Corporation to establish a
more personal communication link with its customers. The integrated SMC Customer Care
Center provides alternative channels for easy access and fast response to varying types of
customer needs and requests.

The Center supports SMC’s businesses in strengthening customer relations, and

indirectly market share as well. It is manned by a professional staff using superior technology
and employing innovative solutions to ensure customer satisfaction and capture product
loyalty. Walk-in customers who may prefer face-to-face interaction feel welcome amidst the
Center’s warm atmosphere.

The Center’s call handling services take care of both inbound and outbound calls,
providing information on the quality, pricing, distribution and availability of a product or
service, while operating as a call center. It also handles order taking, telemarketing, sales
campaign, promotion of new products, and customer satisfaction surveys. Electronic customer
linkages come through e-mail, faxes and SMS (short message services).

The Center’s integrated setup makes it easy for SMC’s operating divisions to link up with
it for their customer and product concerns.

Employee Development

SMC’s strong social responsibility commitment contributes to better employee

retention, resulting in a considerable reduction in turnover and training costs. Employees
normally remain working with the Corporation because of their feeling that SMC cares.

Employee programs that help reduce absenteeism actually save the Corporation money
as they encourage increased productivity. On the home front, programs that address employee
welfare instill a sense of pride in the people for being part of the San Miguel Group.
EMPLOYEE RELATIONS

Sports and Recreation

The program aims to nurture camaraderie and unity among the employees through
various sports activities, such as basketball, bowling, aerobics, street dancing, gym workout
sessions, volleyball, etc. The Corporation tries to meet the employees’ varied sports
preferences. There are also interest clubs being formed for enthusiasts of golf, running,
taekwondo, etc.

Summer Outing
The Corporation provides a yearly venue for employees and management of each
division to interact with one another’s families in an informal environment marked by fun and
games.

Songfest
This is an annual nationwide search for employees who have exceptional talent for
singing, a common trait among Filipinos.

Employee Service Awards

The annual recognition program honors employees for their years of service to the
Corporation.

Baratillo
The monthly event allows employees to purchase various San Miguel products at
discounted prices. The venue is the Head Office Complex, and employees from other SMC units
and offices come to take advantage of the reasonable offers.

Christmas Tiangge
Employees are given the opportunity to develop their entrepreneurial spirit by selling
various products during the two-day event. It is held regularly at the Head Office Complex in
November before the onset of the Christmas season to allow employees and their families and
friends to purchase their Christmas presents early.
Health and Safety
The Corporation ensures that its employees work in a healthy and safe environment.
The health of every employee is a main concern. SMC has an in-house clinic at the Head Office
Complex to take care of employees’ medical needs. Each facility also has its own clinic. It is
mandatory for employees to undergo an annual medical examination.
In case of emergency situations, such as SARS and dengue, a task force is created to
respond to the immediate concern to protect the health of the employees.

Benefits Program of Employees

Employee Protection
Employees are entitled to sick leave benefits that will provide financial security even if
they have lost the ability to earn in times of sickness or injury.

Time Off With Pay

Employees are also entitled to leave benefits that will allow for the continuity of their
wage earnings even if they are on vacation or have to attend to emergency matters requiring
their presence.

Health Care
The Corporation provides a comprehensive medical program for employees and their
dependents to protect them against the financial burden that comes with illness or injury.

Flexible Loan Facilities

The Corporation offers an interest-free loan facility that is tailored to address the
various financial needs of the employees. Its flexibility lies in the loan purpose, amount, and
guidelines.

Educational Program
This helps meet the financial requirements of employees who desire to pursue further
studies. It includes loan facilities for the educational needs of employees’ dependents.
Rice and Clothing Allowances
The Corporation provides a monthly sack of rice to each rank-and-file employee.
Employees also receive a clothing allowance for their proper work attire.

Insurance and Death Benefits

Financial assistance is extended to the bereaved family to help defray expenses incurred
as a result of the demise of the employee or an immediate family member of an employee.

Retirement Benefits
The Corporation provides a noncontributory fund to assist the employee in preparing
for a comfortable life even after retirement.

Employee Benefits Information System (EBIS)

The Corporation uses a computerized system to facilitate on-line processing of
employee benefits, such as statutory benefits, company loans, and separation benefits. This
system also monitors the medical expenses and benefits that employees avail of.

Training and Development

Development has a two-pronged objective: to achieve corporate goals, and to realize
individual employee career objectives. These objectives can be synchronized to propel both the
organization and the individual to reach the highest level.

SMC upholds the principle of total development covering business/management skills,

technical/functional skills, task and people orientation, values and attitudes. Corporate Human
Resources is responsible for continuous learning in the Corporation. Managers have the major
accountability for creating ongoing learning opportunities in their respective work units.
Employees are also accountable for their own learning and initiative to learn.

San Miguel Corporation Training Infrastructure

 Corporate Management Training is under Corporate Human Resources. Functional
Schools are placed under the responsibility of the respective functions/departments concerned.
Core Technology Schools focus on SMC’s core technology. Synergy of all the Schools takes place
through the SMC Training Council where all the Schools are represented. Corporate Training
and Development assists the Functional Schools in curriculum and module design. Experts on
the subject matters come from the respective functions.

Developmental Approaches

These cover formal education and on-the-job learning. Customized internal or external
training programs demonstrate formal education on management/business,
technical/functional skills, people management, and personal effectiveness. On-the-job learning
comes through job transfers/cross-postings, special assignments, coaching/mentoring,
memberships in professional organizations, and self-development.

Environmental Safety

Corporations that go beyond regulatory compliance are rated favorably by most

government offices. They are recognized for taking proactive measures in preventing negative
environmental, health and safety impacts. Recycling and recovery are key factors which cut
waste disposal costs. Reducing gas emissions that contribute to global climate change also
lower costs. Pollution prevention is a discipline practiced in SMC plants which eliminates the
generation of waste at the source.

SMC has pioneered a number of so-called trend-setting practices in its environment

program. It was the first Filipino company that published an Environmental Update in 1996, a
report which was well received by the local business community and its stakeholders, as well as
by business and environment groups abroad. The uniqueness of SMC’s environment program is
its dual focus on both the external and internal environment. The Corporation not only takes
care of the natural environment, but also of its own people and domain.
Environmental Programs

Linis Ofis Program

Translated as “clean office”, this internal program is an integrated approach to solid

waste management in support of the Philippine Government’s Ecological Solid Waste
Management Act (RA 9003). It deals with waste segregation by instilling in SMC employees the
4R discipline – Reduce, Reuse, Recycle and Recover. It aims to educate its workers to value
their environment by practicing segregation, collection, reuse and recycling of disposable waste
in the workplace.

SMC’s Head Office Complex located in the Ortigas Center hub provided three waste
receptacles placed in strategic spots for food scraps or compostable waste, recyclable items
(such as plastic bottles and aluminum cans), and nonrecyclable items or disposable waste (such
as plastic and tetra-pak containers). This is also being implemented in SMC’s other facilities
nationwide. A separate chest of drawers is provided in each department for solid waste with
market value, such as used bond paper, magazines, newspapers and empty ink cartridges.

The program generated P26,000 from the sale of recyclable materials on its first month,
and an average of P12,000 per month. It has also helped in reducing the amount of solid waste,
which normally finds its way to landfills and dumpsites, and easing up on manpower in the
collection of waste.

Emission Profiling

Corporate Technical Services-Environmental Management Group (CTS-EMG) has been

conducting stack emission sampling in SMC-owned plants throughout the country since 1999
even before the promulgation of the Philippine Government’s Clean Air Act (RA 8749) in 2001.
The sampling measures the quality of the flue gas emission of fuel combustion from boilers,
furnaces, and power generator sets using the fully automated Napp-Baldwin Isokinetic sampler.
Its flue gas analyzer, Testo350, a high-tech instrument, is also used to obtain quick results in air
emission quality measurement.
 The emission testing determines the compliance of a plant with the Clean Air Act. Plants
which fail the test are directed to improve the quality of their emission to comply with the law.
The testing carried out in the plants generates savings for the Corporation since it does not
need to spend for the services of testing contractors. More importantly, it improves the
performance and efficiency of air pollution source equipment.

Task Force Hangin

Task Force Hangin is responsible for helping plants comply with the Clean Air Act. The
word “hangin” means “air”. The Task Force is composed of representatives from CTS-EMG, CTS-
Engineering, Corporate Planning and Development, and Corporate Purchasing Unit. It is tasked
to pinpoint the best available fuel and control technology for the plants’ fuel burning
equipment. It conducted numerous studies and came up with recommendations to utilize low
sulfur fuel oil (LSFO) and scrubbers as the most efficient options for solving the problem, and
maintain the level of sulfur content in its fuel to about 0.7%S. It also studied the range of fuel
cost that determines when LSFO fuel is advantageous to use versus scrubbers, and when a plant
needs to shift from LSFO to scrubbers.

The study enabled the Task Force to guide the plants in their compliance efforts. All
SMC-owned plants are expected to institute the necessary actions congruent with the Clean Air
Act. The use of electric heaters at the Mandaue Glass Plant’s furnace reduced the consumption
of bunker fuel oil and the generation of combustion flue gas.

PET Recycling

SMC is setting up a P6.7-billion recycling project to produce environment-friendly

packaging materials for the local food and beverage industries using PET or polyethylene
terephthalate. PET is that soft plastic or polymer popularly used for containers of mineral
water, and various food and household items. It is the preferred packaging because of its light
weight, clarity, and shatter resistance. It also ranks as the most recyclable packaging material in
the world today.
 The main processing plant being constructed in San Fernando, Pampanga, is nearing
completion. It will have conversion operations in Batangas, Cebu, Misamis Oriental, Davao, and
Pampanga. The plant is scheduled to operate commercially in May 2004. PET is already being
recycled abroad into second-generation products, such as T-shirts, windbreakers, sleeping bags,
carpets and athletic shoes, among other things.

Collection of PET bottles is an ongoing nationwide campaign with the support of existing
bottle collectors and SMC’s subsidiary, Coca-Cola Bottlers Philippines, Inc., on the crest of its
successful “Mission P.E.T.” project launched in 2000.

The first of its kind in Asia, SMC’s PET recycling plant will open doors of opportunity in
the community through direct employment and contracting services in line with the
Corporation’s economic and environmental thrusts.

Biogas Recovery

SMC’s breweries in Mandaue, Davao and Polo, and Distileria Bago, Inc. treat their
wastewater employing the anaerobic biological process. A by-product of this process is biogas,
which contains methane gas. The simple molecular structure of methane gas makes it the
cleanest gas in use today. The gas is recovered by the breweries and used as fuel for their boiler
units. A total of 25,940,173

EMS Trainor/Auditor

The Environmental Management System (EMS or ISO 14001) represents a universal

blueprint in managing the environmental impact of a plant or organization. Minimizing the
environmental impact translates into savings through improved efficiency and cost reduction,
particularly in production.

The principal role of an EMS Auditor is to conduct audits in plants to ensure that they
satisfy all the requirements of EMS certification. The auditors undergo training with local
agencies or abroad. CTS-EMG, together with the plant manager, is responsible for the
implementation of the EMS in SMC’s five breweries and Mandaue Packaging Products Plant.
 CTS-EMG recommends that every facility be certified in the EMS, assuring adequate
maintenance of the system through second party audit and surveillance visits.

EMS Implementation in SMPP

The EMS implementation at San Miguel Packaging Products Mandaue Plant resulted in
significant savings worth P4,140,032 and minimized the use of virgin raw materials.

The plant utilizes the treated wastewater originating from the Mandaue Brewery for its
production process. Part of the waste water from the production process is recycled after
undergoing oil-water separation. The water used at the cullet conveyor is also collected and
reused. This scheme reduces the use of raw water and the volume of wastewater discharged to
the environment.

There are other energy-reduction initiatives at the plant. An automatic shut-off

controller is installed in the air-conditioning unit of the offices to cut down on power
consumption. Transparent plastic roofing in the production section also improves illumination
and saves energy.

The plant has a central segregation area for solid waste and used oil. Used oil collected
from the oil-water separation process in wastewater and from the fuel combustion engines is
reused as fuel for power generation at the power plant. Recyclable/reusable solid waste is sold
to recyclers. In 2002, 12,777 metric tons of solid waste sold generated an income of
P4,061,965.

Environmental Forum

CTS-EMG organizes the quarterly Environmental Forum, which started in 1998. The
forum is designed for SMC staff responsible for pollution management and control, particularly
the Pollution Control Officer. Its purpose is to broaden knowledge of environmental laws,
technology updates, waste management, and operation of waste treatment facilities.
 The speakers in the forum most often come from government agencies involved in the
enforcement of environmental laws, experts in the field of environmental engineering and
waste management, and staff of CTS-EMG. The forum also serves as a venue for the staff of
different plants to interact and exchange ideas. For the past years, it has helped build an
environmental network within the San Miguel Group.

BEST PRACTICES

Applied Color Labeling (ACL) Recovery

The previous method for dealing with misprints on bottle labels was water intensive
due to the thorough washing of the bottles. To correct this, a cleaner and better technology
was devised through ACL recovery by manually scraping the misprints, collecting and melting
the paint, then adding it to virgin raw materials for producing labeling paint. The practice of this
alternative method resulted in the reduction of raw water use and the amount of virgin
materials for paint production. The end results are considerable savings.

Vermicomposting of Mandaue Brewery

Vermicomposting is a method of composting where cultured worms eat and partially

digest the organic material in organic solid waste. The composting site is a roofed concrete
housing in a dark environment conducive to worms. The resulting product or vermicompost is
made up of partially digested waste and the excreta of worms. The vermicompost is applied to
a soil conditioner, and is of a more superior quality than ordinary compost. The variety of worm
Mandaue Brewery uses is the African Night Crawler.

Recycling Practices at Manila Plastics Plant

Recycling has been part of the Manila Plastics Plant’s regular operations for 30 years.
From the very start, the plant was already recycling its in-house rejects in the form of plastic.
The rejects are put through a grinding machine then added to virgin raw material at a ratio of
10% recycled crates and 90% virgin raw material. The practice reduces manufacturing cost and
contributes to a cleaner environment.
 Crates rendered defective through handling and usage are condemned, crushed,
reduced to pellet size, and now recycled to make San Miguel Beer green crates.

The plant is on a continuous improvement journey as it studies and develops new

technology for achieving the ideal shades of crate colors by adjusting pigment strength and
formulation. It has gone up to 50% in the recycled material ratio to produce plastic pallets, the
containers used to hold bottled beverages. It is looking into making productive use of plastic
waste and trimmings with the goal that nothing goes to waste. Right pack also recycles its
waste laminates as components of plastic pallets.

Cullet Recovery at Glass Plants

Broken bottles or cullets are given a second life at the Mandaue Glass Plant, Manila
Glass Plant, Prime Pak, and SM Yamamura Asia Corporation, where glass bottles for beverages,
liquor and other products are manufactured. In these glass plants, cullets are used as raw
material for production. The cullets originate from in-house rejects and from plant-accredited
glass buyers. The cullets collected undergo a segregation process. Amber is for Beer, green is
for Sprite, and flint is for transparent bottles. The bottles are ground, mixed with virgin raw
material, and fed into the furnace for melting.

Cullet recycling reduces the amount of virgin raw material used in production. Cullets
contain silica, limestone, feldspar, and soda ash. The plants were able to cut down on their
power consumption since cullets melt faster than raw materials. Cullet recycling also decreases
the volume of glass bottles disposed to the environment.

SM Yamamura Asia Corporation also produces GLASS like bottles that are lightweight,
using fewer raw materials. These lightweight bottles have the same quality and strength as
their heavier counterparts.

Waste Ink Reuse at San Miguel Rengo Packaging Corporation

In the printing of corrugated carton boxes, the ink formulated purposely for a specific
requirement usually has leftovers, which can be used only for the same type of job. When
reorders come far apart, the leftover ink is rendered useless and wasted. In March 2003, the
plant developed a method to reformulate or reconstitute the leftover ink to approximate the
same or a different color shade. Since mid-August 2003, the plant has reused 5,779 kg. of waste
ink, and has saved P650,000 in substituted raw material cost. This helped the plant avoid
expensive waste treatment and disposal costs.

Using Waste for Feeds

Distileria Bago, Inc. reuses its fermentation sludge for fertilizer. SMC breweries also
have a recovery system where spent grain and bagasse from the production process are
collected and used for fertilizer by B-Meg.

Coca-Cola’s “Mission P.E.T.”

Coca-Cola Bottlers Philippines Inc. established the groundwork for this project as early
as 1999. The acronym PET stands for Pinoy Environment Team. The project promotes the
recognition, collection, segregation and recovery of postconsumer PET containers and
aluminum cans in support of CCBPI’s marketing of its products in one-way containers.

CCBPI set up recovery centers in selected supermarkets to rescue post-consumer PET

soft drink bottles with monetary value to encourage consumers to participate in the collection.
The project’s continuing implementation has proven to be a viable contribution towards the
reduction of the solid waste volume. At the same time, collection of PET and aluminum
containers provides livelihood opportunities, helps in the conservation of oil and bauxite
resources, and communicates the value of proper waste management.

Project Blue Sky

SMC’s Polo Brewery pioneered the anti-smoke belching campaign within its premises by
requiring all vehicles entering the plant to submit a certificate of compliance (COC). This
initiative by a private company preceded the much lauded Project Blue Sky of the Department
of Environment and Natural Resources’ Clean Air Campaign launched in 1994. Now more than
120 companies are implementing the “no COC, no entry” policy in their facilities, including
SMC’s Mandaue and San Fernando Breweries. The project is spearheaded by the Center for
Corporate Citizenship of the Philippine Business for Social Progress.

Awards

Tulong-tulong sa Tullahan  San Fernando Brewery 

2002 Anvil Award of Excellence  2001 Healthy Workplace 
(Public Relations Society of the Philippines)  (Department of Health-National and
Regional Level) 
Coca-Cola’s Mission P.E.T. 
2002 Anvil Award of Excellence  Davao Brewery’s EMS and Adopt-a-River
(Public Relations Society of the Philippines)  Project 
2000 Mother Nature Award 
Coca-Cola’s Mission P.E.T.  (Pollution Control Assn. of the Philippines,
2002 Gold Quill Award  Inc.) 
(International Assn. of Business
Communicators)  San Fernando Brewery 
1999 Employer of the Year Award 
Distileria Bago, Inc.  (Social Security System) 
2002 Anvil Award of Merit 
(Public Relations Society of the Philippines) 
Polo Brewery/Bacolod Brewery/Davao
Brewery/CTS-EMG 
Distileria Bago, Inc. 
1997-2000 Ten Outstanding Pollution
2002-2003 Certificate of Recognition as
Control Officers 
Healthy Workplace 
(Pollution Control Assn. of the Philippines,
Regional Winner (Provincial Category) 
Inc.)