San Miguel has authorised the listing of its flagship domestic beer and packaging businesses on the Philippine stock market.

The Asian food and drinks giant confirmed yesterday (8 May) that its local beer business would be spun off before a listing next year.

San Miguel also sought board approval for its beer business to enter into a strategic partnership with Kirin Brewery Company, Ltd.

Following the spin-off, San Miguel Beer Domestic will become a wholly-owned subsidiary under San Miguel Corporation.  A strategic investor of San Miguel since 2002, Kirin Brewery Company, Ltd. has a 20% stake in the company.

According to local reports, the Philippine government still plans to sell its stake in San Miguel this year despite the strategic plans announced by the group today.

Ramon S. Ang, president and chief operating officer of San Miguel Corporation said: "We believe that stand-alone domestic brewing and packaging operations will enhance our companies' ability to compete more effectively in their industries. An IPO would raise for each business much needed equity and allow it to grow faster and partner more effectively with other world class players like Kirin and Nihon Yamamura Glass.

"This will provide both the beer and packaging business the financial flexibility and operating muscle that will boost operations moving forward.

"We are looking to unlock the potential and underlying value of the entire San Miguel Group. This is something we have been looking at for some time now and with this spin-off, we reach another milestone in our long-range plan to transform San Miguel into a more disciplined, high-performing company," said Ang.

The company also reported that it has doubled its net income in the first quarter of 2007.

With the sale of its stake in Coca Cola Bottlers Philippines Inc (CCBPI) to The Coca Cola Company, the group's overall net income amounted to PHP4.33 bn (US$0.09bn) which is double that of the same period last year. 

Excluding revenue contribution from CCBPI, sales revenue reached PHP55.4bn, (US1.17bn) 7% higher than 2006.

Domestic beer operations' income reached PHP2.70bn ($0.06bn), 13% higher than last year. Revenue finished at PHP10.5bn ($0.22bn). 

International beer operations recorded 2% higher volumes in the first period with corresponding sales revenue of US$68.3m. North and South China operations together with Vietnam, Australia, Thailand, and export volumes outpaced last year's performance, said the company.