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Monterey Foods Corporation

Cavite Meat Plant

A CASE STUDY

2011

Berenguel, Carmilyn
Ponciano, Riza
BS Acc 3-1
Monterey Foods Corporation
Cavite Meat Plant

THE COMPANY

Overview

M onterey Food Corporation is a renowned and trusted producer of superior


quality meat products that follows international standards of food safety and
quality management. It is one of the companies included in the portfolio of San
Miguel-Purefoods Co. Inc. which is a subsidiary of the San Miguel Corporation, the
“largest publicly listed food, beverage, and packaging company in the Philippines”.
It has been noted as one of the most formidable brands in the Philippine food
industry alongside Magnolia and Purefoods. From being a cattle ranch based in
Isabela, Monterey has become the “largest hog-breeding, hog growing, and cattle
fattening operations in the country today”.

Executive Summary

Industry: Livestock Farming, Processing and Selling of Meat Products

“For more than 38 years of operation, the company has almost 300 farms all over
the Philippines – owned and contracted, more than 30 which are hog-breeding

Monterey Foods Corporation | 3/1/2011


farms, 11 off-site nursery stations, and more than 250 growing facilities.” The
original breeding farm still exists in Isabela, with the feedlots located at Pampanga,
Laguna and South Cotabato.

Brief History

The corporation, formerly known as Monterey Farms Corporation, started at 1,200


hectares cattle ranch located at Cauayan, Isabela in 1969. It had its humble
beginning until the San Miguel Corporation decided to include it as one of their
subsidiaries. As the San Miguel Corporation seek out growth and expansion, it
acquired Ayala’s Purefoods-Hormel Company forming a new subsidiary – the San
Miguel-Purefoods Co. Inc. Monterey is then held / grouped in its portfolio alongside

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those who are also included as some of the toughest competitors in the Philippine
food industry such as Purefoods-Hormel Co. Inc., Magnolia, and San Miguel Mills Inc.
From then on, it has become a household name for quality meat products, and is
considered as having the country’s largest hog and cattle operations.

Mission

Stated below is the corporate mission of Monterey Foods Corporation:

“We are committed to:

• Produce and supply basic meat products that will consistently fulfill
applicable regulatory and satisfy customer requirements.

• Delight our own customers with timely, reliable and responsive services that
are attuned to their dynamic needs.

• Develop skilled, empowered, motivated employees through different


interventions and by providing a balanced work of life.

• Create and manipulate win-win relationship with our business partners and
provide opportunities for mutual growth

• Practice social responsibility in the community where we operate by

Employing environment-friendly practices and consistently complying


to all relevant laws and regulations

Participating in community relations program”

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Vision

Monterey Foods Corporation envisions being the:

• “world-class abattoir and deboning facility fully utilizing appropriate state of


the art technology and process”

• “preferred supplier of quality, fresh, clean, and sale meats in the Philippines”

Values

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In the pursuit and performance of these objectives, we shall espouse and live by
these values:

• Sense of ownership

• Customer orientation

• Respect for self and others

• Integrity

• Passion for quality, food safety and excellence

• Teamwork

• Innovations

• Social responsibility

COMPANY STANDING
From a simple farm to being a subsidiary of one of the largest companies in the
Philippines, it’s not difficult to penetrate the market and gain its top spot.
Considering its parent’s reputation, Monterey can be considered to be living in its
standing. For almost thirty eight (38) years of operation, “Monterey meat products
already became a part of the everyday Filipino Life”.

Monterey Foods Corporation | 3/1/2011


FINANCIAL PERFORMANCE
The following are actual excerpts from the submitted Consolidated Financial Report
of San Miguel Corporation for public viewing in PSE (http://www.pse.com.ph/):

• Monterey is a 97.68%-owned subsidiary of SMPFC.

• In April 2009, Monterey acquired the subscription rights of certain individuals


in High breed Livestock Corporation (HLC), a company that is also engaged in
the same line of business as that of Monterey. HLC thereafter became a

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subsidiary of Monterey. In June 2009, HLC was merged into Monterey, with
Monterey as the surviving entity. The consideration of the assignment of the
subscription, net of the effect of the merger, amounted to P6.25 million. The
SEC approved the merger on October 22, 2009. The BIR confirmed the tax-
free merger of HLC into MFC in its certification No. S40-052-2009.

• The Monterey business posted a significant improvement from 2008’s losses


owing to cost reduction initiatives, operational efficiency, improvements and
cost breaks in raw materials. Sales revenue rose 15% higher than 2008 at P7,
303 million.

• With more than 166 Monterey Neighborhood Meat shops and 250 Monterey
Supermarket Meat shops, the business continued to expand distribution and
widen product availability, which helped in driving sales.

• Nine more Monterey Meat shop outlets were opened in 2008 with sales
volume rising phenomenally every month. As of December 31, 2008, there
are 14 Monterey meat shops in Vietnam that are performing well.

• Noncurrent biological assets increased by 38% to P1,814 million due to the


start of operations of the Sumilao farm in 2008 and the increase in volume of
Monterey and Poultry’s breeding stocks coupled with higher growing costs

PRODUCT AND SERVICE DESIGN

Monterey Foods Corporation | 3/1/2011


Monterey offers a wide variety of products under the meat category. It supplies
quality-grown beef, pork, and lamb meats. The whole list products offered by the
company can be seen at Appendix D. The company can easily be reached for it
extends its business from meat plants, to meat shops which are strategically placed
to various places in the country which will be discussed later on.

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F IGURE 1P RODUCE AND D ELIVER P ROCESS

“From the farm, freshness is locked through an advanced chilling process and
checked by the National Meat Inspection Services. From the farm to the market....
Just in time for a meal.” – from a monterey advertisement

“WHY CONSUMERS CHOOSE MONTEREY

• Guaranteed Fresh, Guaranteed Disease-Free Monterey


meats are chilled via a unique, advanced blast-chilling process right
after slaughter. This neutralizes bacterial growth and ensures that
freshness is locked in. Monterey meats are also checked daily by the

Monterey Foods Corporation | 3/1/2011


National Meat Inspection Commission to guarantee that it is foot-and-
mouth disease-free.

• Leaner Meats Monterey hogs and cattle are Grade-A imported


breeds subjected to strict growing and feeding practices – for leaner,
higher quality meats.

• Improved Tenderness At Monterey, hogs and cattle are handled


with much care – from breeding up to slaughtering and storage. Its
animals are rested just prior to processing to prevent muscles from

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becoming tough due to stress. This procedure helps improve meat
tenderness.

• Availability and Convenience Monterey meats are made


available to consumers via a nationwide distribution network of
Monterey Meatshops in many neighborhoods and major supermarkets.
For added convenience, Monterey Neighborhood Meatshops offer Free
Delivery Service.”

-http://www.giuseppesresto.com/

Since Monterey is dedicated to total quality, their meat products are delivered by
“refrigerated Monterey trucks” and are available in a variety of Monterey outlets be
it Monterey meat shops, in supermarkets, or in Monterey satellite outlets. As it
follows the “farm to market” concept, the consumers are “assured of quality meats
in every meal”.

QUALITY

In over to withstand the competition, a company must possess the guts to stay in
the market without sacrificing the quality of service or the products that it provides
to its consumers. Monterey is committed to Total Quality Management; in fact, its
Cavite Meat Plant met the requirements of the International Organization for
Standard (ISO), an international standard-setting body, and achieved the ISO

Monterey Foods Corporation | 3/1/2011


9001:2000 Certificate for slaughter, production and delivery of meat products, and
sale of live hogs and cattle. It is the very “first ISO 9001:2000 certified slaughter
and boning facility in the Philippines”.

The Monterey Meat Plants operate under a quality


policy stated below:

“Monterey Quality Policy

• Monterey Cavite Meat Plant is


committed to significantly contribute

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to the over-all business excellence of Monterey Foods Corporation and
SMPFC, Inc.;

• To adhere to the principles of SMC’s Corporate Quality Policy;


F IGURE 2 ISO L OGO FOR S YSTEM C ERTIFICAT ION
• And to adhere to the principles
of SMPFC, Inc Food Safety Policy, by:

Producing and delivering safe quality products and services that


consistently secure the loyalty and patronage and enhance the
satisfaction of our customers

Creating and maintaining a work environment where employees can


excel to the best of their abilities and where quality and food safety is
a way of life; and

Providing mutual growth opportunities and positively enhancing


relations with our stockholders.”

We have a system that defines product / service quality and food safety
requirements, measures performance against quality objectives; and assures
continuous improvement.

We are a living testament to San Miguel’s tradition of being the “Home of Quality
Products and People”.

The ISO certification award simply expresses the company’s commitment to

Monterey Foods Corporation | 3/1/2011


providing customer satisfaction and delight by delivering quality products and
services.

The company also operates with “Cold Chain Management”, a management system
which utilizes “cold-chain” or a temperature-controlled supply chain. “Monterey
meat have gone through an advanced blast-chilling process right after slaughter so
bacterial growth is neutralized and freshness and nutrition is locked in.

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COLD CHAIN MANAGEMENT

• Benefits:

Preserve freshness of meat products

Maintain good quality

Longer shelf life

Minimize spoilage

Increase revenue

A. Working Area

Installed plastic curtain in room entrances

Keep the door closed when not in use.

B. Delivery Van:

Maintain the reefer van temperature at 4 degrees Celsius and below.

INVENTORY MANAGEMENT

Monterey has been producing its own supplies ever since. From the time it started

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as a humble ranch, they’re doing it the traditional way. And as the use of
technology became highly demanded, Monterey was able to adapt. Today,
“Monterey had been dynamically performing 100% artificial insemination to the
swine breeding herd” to increase the efficiency of its production to respond to the
growing demand of its consumers.

The ration given to the hogs all the time are being provided or supplied by B-Meg, a
sister-company and also a subsidiary of the San Miguel Corporation. B-Meg
guarantees that the ration given to the hogs are freshly-mixed coming from
different owned and managed feed mills around the country. Growth of the hogs is

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being promoted by using advanced technological facilities, thus having shorter days
to market.

“Purchase of biological, supplements, diagnostic kits, and chemotherapeutics” are


only made on reliable suppliers and manufacturers to “consistently ensure product
quality and safety”. Peak Season for production would start from October continuing
up to December, every year.

FACILITIES AND MAINTENANCE

Monterey extends to various lines of business incidental to its production: from


farms and meat plants, to meat shops and retail franchises - Each of which are
strategically placed in various places in the Philippines.

The very first Monterey farm was located in Isabela before it was acquired by the
San Miguel Corporation as its subsidiary. And after 38 years of operation, it has
expanded to 300 farms all over the Philippines.

Monterey allows partnerships though Hog Contract Growing which requires some
qualification for site locations:

“SITE QUALIFICATIONS
CAPACITY: 400-5000 heads
Location:
Region 1: (Pangasinan, Ilocos)
Region 2: (Isabela)

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Region 3: (Zambales, Bataan, Bulacan, Tarlac, Nueva Ecija, Pampanga)
Region 4: (Batangas, Laguna, Quezon, Cavite)
Region 5: (Camarines Sur, Albay)
Region 6: (Iloilo)
*Within the agricultural zone of the community
*1 km. away from the nearest built up residential areas and farms

Locations must have:


*Abundant source of potable water
*Reliable source of ELECTRICITY

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*An all weather ROAD, for 6-wheeler trucks
*Good PEACE and ORDER”

Strict compliance with these qualifications is required to perfect the contract along
with other requirements that are specifically requested by the company. And these
very qualities are what makes the company excel among others – it strictly follows
protocol.

Also noted for its excellence is the Cavite Meat Plant of Monterey, which is the first
ISO Certified Slaughterhouse in the Philippines, alongside being the first HACCP
Slaughter plant (“HACCP or Hazard Analysis Critical Control Point is a systematic
preventive approach to food safety and pharmaceutical safety that addresses
physical, chemical, and biological hazards as a means of preventions rather than
finished product inspection.”).

Monterey Cavite Meat Plant

General Information

• Established in August 8, 1988

• Accredited “AAA” Slaughterhouse by the National Meat Inspection Service

• Total Land Area of 6.5 hectares

• Total covered are of approximately 6, 800 square meters

Monterey Foods Corporation | 3/1/2011


Nurseries and growing facilities are used
to manage the growth of the animals.
“State-of-the-art facilities” are also
employed to improve the efficiency of
processing and production. Example of
which is the use “climate-controlled
housing system”.

Franchising also allowed Monterey to


expand its business quickly. In 1990, the
company started with only 4 meat shops.

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(See Appendix F for Present Monterey Outlets at Cavite, Southern Luzon Area) Due
to its high-quality products and services, it has gained continuing patronage of
many Filipino consumers. The number of franchiser increased over the years
increased rapidly making it the largest meat supplying company in the country.
Today, Monterey’s franchised meat shops can be found all over the country, even
inside major retail stores and supermarkets.

Each meat shop are “stand-alone” outlet


F IGURE 3A N EXAMPLE OF FACILITY MAINTAINED BY
which delivers a variety of meat products M ONTEREY OUTLETS . F RANCHISE BY G UISEPPE ' S
MONTEREY MEATSHOP
(list of products can be found at Appendix D)
and are equipped “modern fabrication equipment and display showcase” alongside
advanced refrigeration. Each outlet is manned a crew of butchers and
merchandisers as well which are trained by the company school itself, the Monterey
Meat School, in order to deliver quality, courteous, and efficient service.

HUMAN RESOURCE AND LABOR RELATIONS

One of the Mission of Monterey is to “Develop skilled, empowered, motivated


employees through different interventions and by providing a balanced work of
life”. Upon interview of several employees of the company, it can be concluded that
they are quite satisfied with how the company handles and supports its labor force.
Predictably, the basic compensation is given along with common benefits. Certain
allowances are additionally given such as uniform allowances and insurance, and a

Monterey Foods Corporation | 3/1/2011


5-day additional incentive to be added to their 13th month pays. Occasionally, the
company also gives rewards for employee accomplishments which motivate
employees to continue doing quality service.

In order to maintain its quality standard, Monterey decided to put up a school, the
Monterey Meat School, designed to train its employees in achieving excellence in
providing quality service. Only trained and experienced technical personnel are
trusted to handle the “macro and micro-operations of the company”. Also, “experts
in the fields of swine and cattle breeding, nutrition, health, and diagnostics,
husbandry, research and recording systems” are employed to ensure high-class
processing and production. They are attending “various local, national, and

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international hog trainings and conventions” in order to expand their knowledge in
their fields and help integrate the company’s operations. Hence, Monterey has
become the “first and leading swine integrator in the Philippines”.

SOCIAL RESPONSIBILITY

Monterey also organized several campaigns to “underscore the brand’s


commitment to corporate responsibility” following the steps of its parent company,
the San Miguel Corporation. Included in some of the programs organized by the
company alongside other subsidiaries of SMC in terms of fulfillment of its social
responsibility is the “Buy for Bicol” Program. In celebration of the meat
company’s 38th anniversary, Monterey along with Magnolia Chicken, organized a
fund raising activity which was attended by several high officers of the said
company. “Buy for Bicol was a 2-week campaign that served as a means for Pinoys
to help fellow Pinoys devastated by typhoon Reming.” For every purchase of
selected products of Monterey and Magnolia, P5.00 was donated for the relief and
rehabilitation of the Bicol Region through the San Miguel Corporation.

Monterey is also associated with the San Miguel Foundation, Inc. who also crafted
various programs and projects that addresses social issues.

Monterey Foods Corporation | 3/1/2011

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APPENDIX A
Monterey Foods Corporation

Corporate Logo

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Company Slogan

Source:

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http://www.monterey.com.ph/

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Monterey Foods Corporation | 3/1/2011
APPENDIX B
Cavite Meat Plant
1. Lairage

2.
Hog

Line

3. Cattle Line

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4. Chillers

5. Fabrication

6. Logistics

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Sour
ce:
http://www.monterey.com.ph/monterey_meat_plant.html

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APPENDIX C
Cavite Meat Plan – Awards and Recognitions
1999 – Cleanest AAA Slaughterhouse

2000 to 2003 – Best AAA


Slaughterhouse

2003 - Hall of Fame Award

2004 – Seal of Excellence Award

2005 – Seal of Excellence Award

2006 – Seal of Excellence Award

2003 – HACCP for Chilled pork and


beef carcass

1 HACCP Certified Slaughterhouse


ST

ISO 9001:2000 Certification

Monterey Foods Corporation | 3/1/2011


Monterey Cavite Meat Plant is the
very first ISO 9001:2000 Certified
Slaughter and boning facility in the
Philippines

Source:

http://www.monterey.com.ph/monterey_meat_plant.html

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APPENDIX D
List of Products
Beef
Tenderloin Beef Stroganoff
Tenderloin Steak Flank Steak
Tenderloin Tips Mechado
Striploin Kalitiran
NewYork Cut Morcon Slice
Striploin Roast Top Round Round
Rib Eye Round
Rib Eye Steak Bottom Round
Rib eye Roast Eye Round
Rib eye Sukiyaki Shin
Porterhouse Beef Cubes
T-bone Brisket B/L
Prime Rib steak Ground Round
Rib Roast Ground Beef
Rib Primal Camto
Sirloin Chuck Rib Steak
Sirloin Roast BBQ Steak
Roast Beef Back Rib
Sukiyaki Cut Short Ribs
Breakfast Steak Shank
Filipino Beef Steak Beef Neck
Kaldereta Cut

Beef – Others
Ox Tougue Kare-kare Cut
Ox Tail (Skinless) Ox Liver
Ox Tail Knee Cap
Ox Tripe local Beef Sawdust
Ox Tripe imptd. Beef Bones
Ox Face Bone Marrow

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Ox Feet

Beef Timplados
Ox Tougue Kare-kare Cut
Ox Tail (Skinless) Ox Liver
Ox Tail Knee Cap
Ox Tripe local Beef Sawdust
Ox Tripe imptd. Beef Bones
Ox Face Bone Marrow
Ox Feet

Pork
Tenderloin Baby Back Ribs
Pork Tenderloin Tips American Style Rib

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Pork Sukiyaki Roast Pork
Butterfly Cut Crown Roast
Pork Cutlets Pigue (Skin-On)
Boneless Porkchop Pigue (Skinless, Boneless)
Country Style Kasim (Skin-On)
Bacon Slice Kasim (Skinless, Boneless)
Pork Steak Pork Belly (Skin-On, Bone-In)
Porkloin Chop Porkchop (Skin-On)
Menudo Cut Porkchop (Skinless)
Pork Cubes Rib Shoulder
Adobo Cut Pata Front
Sinigang Cut Pata Hind
Lean Ground Pork Pig Tail
Ground Pork Pork Shank
Pata Slice Pork Kare Kare Cut
Pork Hock Pork Paksiw Cut

Pork – Others
Pork Saute Tampalen
Skin Pork Sawdust
Back Fat Pork Liver
Pork Bones Pork Bopis
Hog Head Boneless Head
Pig's Feet

Pork Timplados
Filipino Bacon Pork BBQ slice
Breaded Porkchop Pork BBQ Bback Ribs
Breaded Porkstrips Marinated/BBQ Belly
Longanisa Recado Hawaiian Roast
Longanisa Hamonado Shanghai Mix
Pork Tocino Lumpiang Shanghai
Pork Tapa Special Sisig
Pork Korean Pata Tim
Pork Teriyaki Embutido
Korean BBQ Chops Bola Bola
Smoked Chops Humba
Smoked Bacon Skinless Chorizo

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Pork BBQ skewered International Sausages (Hungarian
Pork BBQ steak Sausage, Spicy Hungarian
Sausage, Spicy Sausage, Italian
Sausage, Spanish Sausage and
Chinese Sausage)

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Lamb

Lamb Chops Lamb Rack


Lamb Stew Midloin Chops
Lamb Shank Roast Lamb
Lamb Leg Rib of Lamb

Lamb Timplados

Lamb BBQ Chops Lamb Tapa


Honey Glazed Lamb Chops BBQ skewered Lamb
Premium Lamb Burger

Monterey Foods Corporation | 3/1/2011

Source:

http://www.monterey.com.ph/products.html

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APPENDIX E
Basic Products with Corresponding Prices

Pork

CUTS PRICE (per kilo)

Porkchop 191
Liempo 209
Kasim 191
Pork cubes 216
Pork cutlets 216
Pata front 155
Pata Hind 145
Rib Shoulders 176

Beef

CUTS PRICE (per kilo)

Beef cubes 286


Beef shank 270
Beef Shirloin 434
Stroganoff 387
Brisket 282
Butterfly cut 216
Canato 277

Others

CUTS PRICE (per kilo)

Porkchop 191
Liempo 209
Kasim 191

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Pork cubes 216
Pork cutlets 216
Pata front 155
Pata Hind 145
Rib Shoulders 176

Source:

Monterey Meat Shop – Cavite Meat Plant

APPENDIX F
List of Outlets

South Luzon Area – Cavite

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Trade Name Address

Lets Meat Here


# 103 Don Placido Campos ave. Dasmariñas, Cavite
Meatshop
Meatfull Cityoil Compound, Governor's Drive, General Mariano Alvarez,
Meatshop Cavite
Well Done Inc. JP Rizal st., Silang, Cavite
PPMMC Monterey Meat Plant, Brgy. Langkaan, Dasmariñas, Cavite
Southmart Corp 324 Nueno st., Imus, Cavite
Lets Meat Here
G/F CMJ Bldg 315 Street Molino Bacoor
Meatshop II
Meatfull
Olivarez Plaza Tagaytay City
Meatshop 2
Ricardo A.
L-Paseo Arcade Indang Trece Road cor Governor's Drive Trece
Pelejo Jr
Martires Cavite
Meatshop
Golden Egg 305 P Burgos Ave. Caridad Cavite City
Infinity
Bautista Arcade, Brgy. Samala Binakayan, Kawit Cavite
Meatshop
Etruiste
25 Hawaii St. Camella Homes Salinas 4 Bacoor Cavite
Meatshop
Ashrielle WEE Bldg. Crisanto delos Reyes Ave., near Gov't Drive Manggahan
Enterprise General Trias
Infinity 18
Zapote Bacoor Public Market Bacoor Cavite
Enterprise
VDU'S Meatshop Apt C Daang Amaya Tanza Cavite
CBJI Enterprises General Trias st. Silanganan 2, Rosario Cavite
Nicole and Buenavista Building Lot 31 Block 55 Golden Miles Highway Brgy.
Nikko Salawag Dasmariñas
RFAR Enterprise Captain C. Nazareno St. Naic, Cavite

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Meatfull 3 Crossing Mendez Tagaytay City

Source:

http://www.monterey.com.ph/locator_cavite.html

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Monterey Foods Corporation – Cavite Meat Plant

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Monterey Foods Corporation | 3/1/2011


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