PSE Circular for Brokers No. 044-00

January 10, 2000 PSE CIRCULAR FOR BROKERS NO. 044-00 SMC STAFF UNITS' INTEGRATION TO SAVE OVER P500M Integration of the San Miguel Corporation (SMC) offices is a key component of the management objective under San Miguel Chairman and Chief Executive Officer Eduardo M. Cojuangco, Jr., to reduce costs and speed up the communication and feedback process within the group's organization. This move, along with the company's organizational restructuring over the last 18 months, will result in estimated savings of over half a billion pesos on an annual basis. prcd To better facilitate the processing of all operational and financial information within the group, both domestic and international, San Miguel plans to further enhance its total on-line system for its head office units. SMC is expected to complete early this year the relocation of all its staff and service units in Metro Manila to the SMC Head Office Complex (HOC) and to its adjacent San Miguel Properties Centre (SMPC) in Mandaluyong City. This March, the San Miguel Food Group is also scheduled to transfer its offices to SMPC from its rented offices in West Bicutan, Taguig. Last month, San Miguel Packaging Products (SMPP) moved to the SMPC from a fully-rented building in Makati. The Headquarters of SMC subsidiary La Tondea Distillers Inc. (LTDI) transferred last November to the San Miguel Properties Centre from the Quiapo district, resulting in lower maintenance expenses and better operating efficiencies. This relocation is part of SMC's strategy to centralize such support functions as purchasing to negotiate better terms from suppliers. In January 1999, the regional office of San Miguel's international beer operations was relocated from Hong Kong to the SMC Head Office, eliminating costly rental and utilities. This transfer dovetailed with the downsizing of the international operations' organizational structure and the repatriation of its Filipino personnel in Hong Kong, resulting in an estimated annual savings of US$10 million. A complete directory of SMC service and staff units at the San Miguel head office and San Miguel Properties Centre will be published in local newspapers and posted in its internet web page soon after the company completes the integration.