Philippines-based diversified alcoholic beverage company Ginebra San Miguel (GSMI), the beverage manufacturing arm of San Miguel, has announced the acquisition of East Pacific Star Bottlers Philippines for P200m ($5m).
The beverage giant has bought 100% of the total outstanding shares of East Pacific Star, which is mainly engaged in the manufacture and bottling of alcoholic and non-alcoholic beverages.
GSMI corporate secretary Virgilio Jacinto said, 'the acquisition will forge synergies with the company's ongoing operations and provide additional capacity for the contemplated expansion plans of the company.'
Soft demand for liquor products in the first nine months of 2011 continued to weigh down GSMI, which reported a 31% decline in net revenue sales of P11.5bn ($268m) compared to the previous year.
The company's third quarter sales were further reduced by the adverse weather conditions, particularly in the month of September, which hampered selling activities in most sales areas, predominantly in North Luzon.
Its gross profit margin decreased by 38% due to lower sales coupled with an increase in excise tax and bottle costs, the company said.
In the fourth quarter of 2010, GSMI entered into a long-term loan agreement of P1.5bn ($35m) and increased its short-term borrowing to fund the increase in working capital and other investment requirements.
GSMI's core products include Ginebra San Miguel Gin, GSM Blue Gin and Gran Matador Brandy.
The company, which makes and sells non-carbonated ready-to-drink tea and fruit juices under the Magnolia brand, has a joint venture agreement with the Thai Life Group of Companies for production and sale of distilled spirits in Thailand.