SAN Miguel Food and Beverage Inc. (SMFBI), the food unit of conglomerate San Miguel Corp. (SMC), assured Filipino consumers on Wednesday that its processed meat products, including Tender Juicy hot dogs, would remain available in the domestic market amid industry concerns over tightening raw material supply.
In a statement on Wednesday, SMC said SMFBI’s refrigerated meat products and canned goods “will remain available in supermarket shelves and other retail outlets, despite global challenges that affect the cost and availability of raw materials.”
“Since the start of the pandemic, our Food business has strived to make our supply chains more agile and resilient. As a result, we have expanded our raw material supply sources, and have also increased our flexibility in terms of production,” SMC President and CEO Ramon S. Ang said.
Nonetheless, SMC admitted that SMFBI is affected by the tightness in supply of mechanically deboned meat (MDM) of chicken, global price increases and import restrictions, given that it is one of the major importers of raw materials in the country.
SMC said SMFBI uses close to 100,000 metric tons (MT) of raw materials every year.
However, SMC maintained that it is “confident that with keener anticipation of global trends and its ability to make quick adjustments in production, it can sustain and assure availability of its products.”
Ang said, “When you have enough meat and packaging materials, along with ample manufacturing capacity, you can ensure continuous supply.
“As we have done throughout the period of this pandemic, we can continue to provide for the needs of our consumers despite the present challenges.”
Ang said it has been SMC’s strategy “to build around its integrated value chain,” enabling the company to “utilize more of its internal raw material sources for its value-added meats production needs.”
“Food security is always one of our top priorities,” he said. “With our consumers’ needs always top of mind, we want to assure everyone that they can continue to enjoy their all-time favorite Purefoods Tender Juicy hotdogs, luncheon meat, chicken nuggets, bacon, and corned beef,” he added.
Own facility
SMFBI has its own manufacturing facility that produces chicken MDM for its internal use. SMFBI officials earlier said the cost of producing chicken MDM locally is “about double” the price of imported MDM.
However, SMFBI noted that it is committed to hike its chicken MDM production of chicken MDM since it can manage the costs if the raw material is used internally. Chicken MDM is one of the primary raw materials used by processors to produce hotdogs, siomai, luncheon meat, beef loaf, meat loaf, among others.
The BusinessMirror published a series of stories this week explaining the problems confronting the domestic meat processing industry from depleting stockpiles of chicken MDM to persisting global shipping problems.
On Wednesday, the BusinessMirror reported that prices of local processed meat products may increase by as much as 20 percent—on a staggered basis over the next eight months—as processors start to use more expensive raw materials. (Related story: https://businessmirror.com.ph/2021/05/26/processed-meat-products-prices-may-rise-20-for-rest-of-the-year/)
The Philippine Association of Meat Processors Inc. (Pampi) said the industry has “used up” all of its lower-priced chicken MDM supply and has started to use the ones bought at $1.2 per kilogram to $1.4 per kilogram price tag since mid-May.
“We can no longer absorb the impact to our cost. By June onwards, [chicken MDM] arrivals will be at $1.50 [per kilogram] to $1.60 [per kilogram],” Pampi Vice President and CDO Foodsphere Inc. President Jerome D. Ong told the BusinessMirror.
“Processors will have to increase prices by 15 [percent] to 20 [percent] to stay afloat,” Ong added.
Ong explained that the increase in their prices would not happen overnight but stretched in increments of 3 percent to 5 percent in the course of the next six to eight months.
The staggered increase in prices would provide sufficient elbow room for both meat processors and the government to work out solutions to ease chicken MDM supplies.
The prices of chicken MDM, particularly those from Brazil and North America—the ones currently available to the Philippines—have skyrocketed to $1.6 per kilogram, more than thrice its $0.5 per kilogram price last year.
At present, Ong estimates that the industry’s chicken MDM inventory ranges from 30 days to 45 days.
The BusinessMirror broke the story this week that meat processing companies, whether small or big players, have started to limit their product distribution in the market given the lack of raw material supply.
Industry sources told the BusinessMirror certain brands of hotdogs and canned meat products are now absent from supermarket shelves while other companies are not anymore selling in the Visayas and Mindanao.