Eduardo Cojuangco said the project, in collaboration with the Philippine government, would develop one million hectares of land. He said the two companies were willing to spend up to $1,000 per hectare.
The two companies signed a memorandum of agreement with the government at the Bonifacio Global City in Taguig City last week.
Dubbed "Feeding Our Future," the project will provide a sustainable, adequate supply of grains, sugar and other basic staples.
President Gloria Macapagal-Arroyo said this partnership "offers a signal that food security transcends both public sector and private institution."
San Miguel and the group of Hong Kong-based billionaire Robert Kuok will offer financial assistance, technical expertise and a guarantee to buy all agricultural produce.
San Miguel and the Kuok group would split a 30% equity infusion in the project while the remaining 70% would be raised through long-term debt issues, San Miguel president Ramon Ang said.
"Our priority is always rice, corn, sugar, coconut, and maybe later on other crops like palm," adding San Miguel will convert most of the produce into animal feed. "We have feed mills so we can use it," he said.
Palm oil giant
Ang said the country would benefit from the expertise of the Kuok group, which owns Wilmar International, the world’s largest listed palm oil trader.
All land will be owned by the Philippine government. The Department of Environment and Natural Resources, Armed Forces of the Philippines, National Commission on Indigenous Peoples, and the National Power Corporation will identify, evaluate, and review government lands suitable for food production.
The land may include logged-over areas, idle portions of military camps and reservations, idle portions of land granted to state universities or colleges, and idle portions of ancestral lands.
San Miguel is looking to break ground at its first farm cultivation project next month.