By Leslie Lau - Consultant Editor Malaysian Insider
KUALA LUMPUR, Sept 13 – Mirzan Mahathir has defended his investment group’s stake in Philippines conglomerate San Miguel Corp (SMC), saying the company was well on the way to diversifying substantially from its brewery business.
In a letter to The Malaysian Insider yesterday, Mirzan said San Miguel Corp had decided to shift its attention to the infrastructure, public utility and energy requirements of the Philippines, from its core brewery business.
“Since Kirin Holdings of Japan acquired a significant direct ownership stake in the brewery division, this will result in a dramatic change in SMC’s revenue mix, with beverages expected to contribute less than 15% of total sales by next year,” he said in the letter.
The Malaysian Insider had reported this week that Mirzan, the eldest son of Tun Dr Mahathir Mohamad, was recently appointed to the board of San Miguel Corp, the biggest food and beverage conglomerate in the Philippines and the owner of San Miguel Brewery Inc.
San Miguel Corp told the Philippines stock exchange last week about Mirzan’s appointment which is to represent the interests of Q-Tech Alliance Holdings Inc on the board.
Q-Tech, a Manila-based investment company in which Mirzan has a stake in, recently acquired a 19.9 per cent share in San Miguel Corp for 39.61 billion pesos (RM2.9 billion).
It bought the stake from Japan’s Kirin Holdings, which used the funds to help finance the acquisition of a 43 per cent stake in San Miguel Brewery Inc.
With this latest corporate exercise, San Miguel Corp still maintains a 51 per cent stake in San Miguel Brewery Inc.
San Miguel Brewery controls 95 per cent of the Philippine beer market. The company has made San Miguel Beer for more than a century. The beer is brewed in the Philippines, China, Indonesia, Vietnam, Thailand and Malaysia, and is sold in 60 markets worldwide, according to the company’s Web site.
Mirzan’s involvement in the deal, while a sound investment decision, has raised some eyebrows among Malaysia’s conservative Muslim community.
Since news of Q-Tech’s acquisition of San Miguel Corp shares began circulating here, a number of news blogs have used it to attack Dr Mahathir’s Muslim credentials.
“Unfortunately, certain parties are keen to turn this exciting positive change in a well managed Philippines corporation into an assault on the reputation of my father, even though he has nothing whatsoever to do with my business interests.
“I can only provide a rational explanation for my actions and it would be a pity if facts are twisted to gain dubious points from a straightforward business decision,” said Mirzan.
He said San Miguel Corp’s major diversification move was a major reason for his participation and starts a new era for the conglomerate.
Mirzan went on to list down some of San Miguel’s diversification acquisitions in recent years.
These include an option to acquire a controlling interest in Petron Corp., the largest Philippine oil refiner which owns 1,400 retail stations, and a substantial equity stake in Manila Electric Co., the largest distribution utility in the Philippines that has a base of over 4.5 million customers.
SMC has also announced its intention to venture into the telecommunications industry through their stake in Liberty Telecom Holdings Inc. with Qatar Telecommunications Co. to initially build a Wi?Max network and potentially a full?scale national cellular operation.
The company also recently won in a public auction, two major power plants with a combined generation capacity of 1,600 MW.
“Your article covered the beverage aspects of San Miguel but ignored the company’s recent purchases and strategy moving forward.
“As a Malaysian, I am looking forward to assisting San Miguel chart this new course and hopefully, its success will reflect well on our country and people,” said Mirzan of the report in The Malaysian Insider.
Mirzan’s corporate forays have not been without controversy.
He once controlled Konsortium Perkapalan Bhd when Dr Mahathir was prime minister, but was forced to sell its shipping assets to Malaysia International Shipping Corporation (MISC), in what critics said then was a bailout.
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