Econ
Domestic brewers expand to compete against foreign rivals
As foreign brewers are strengthening their foothold in Vietnamese beer market, domestic businesses are also implementing plans to enlarge the market share.
The latest move was seen in Saigon-BinhTay Beer JSC (Sabibeco), an affiliated brewer of Vietnam’s leading beer firm Sabeco. Sabibeco on April 16 kicked off the construction of the VND900 billion (US$39.51 million) Saigon-Long Khanh beer production plant in the southern province of Dong Nai.
The 4.5ha plant, which will be equipped with machinery and manufacturing lines imported from beer manufacturing equipment supplier Krones Group, is expected to put into operation by April 2019 with the annual capacity of 100 million liters.
According to the plan, Sabibeco will increase its capacity to 1 billion liters per year by 2020. Once the Saigon-Long Khanh plant comes into operation, it will be the sixth beer manufacturing plant operated by Sabibeco. At present, the firm’s five beer manufacturing plants are focusing on improving the Sagota beer brand in both the domestic market and overseas markets.
With the plant, Sabibeco targets to become the leading brewer in the country in the next few years.
With an annual consumption of roughly 3.8 billion liters of beer, Vietnam is an attractive market luring in numerous foreign brewers, including Carlsberg, Heineken, and AB Inbev. These investors are determined to increase their market shares via M&A deals.
Notably, in March, Cees’t Hart, chair cum general director of Carlsberg, arrived to Hanoi to look for specific plans to increase Carlsberg’s holding in Habeco.
In the framework of the visit, representatives of Carlsberg discussed with the Ministry of Industry and Trade (MoIT), Habeco, and relevant authorities the state divestment progress.
Along with Carlsberg, Heineken and AB Inbev also expressed ambitions to acquire Habeco’s stakes to increase their market share in Vietnam.
Another foreign brewer wanting to increase its presence in Vietnam is Thai Beverage (Thaibev). Accordingly, after acquiring a 53.59 per cent stake in Sabeco, Thaibev announced plans to sell between 1.85 and 2 billion litres of beer and increase Sabeco’s market share to 50 per cent this year.
In its report released last year, Euromonitor International predicted that Vietnam will be the next major battlefield for brewers.
“While volume sales are struggling in the leading markets, SE is forecast to see absolute volume growth of 2.3 billion liters over 2016-2021, led by Vietnam,” the report says.
While the average beer consumption volume in the world hasn’t increased over the last decade, sales in Vietnam have been soaring steadily. In 2008, Vietnam ranked eighth in Asia in beer consumption. Eight years later, it jumped into the third position, just after Japan and China.
According to Ban Viet Securities (VCSC), the Vietnamese beer market is controlled by four big manufacturers, namely Habeco (Hanoi Brewery), Hue Brewery (100 percent owned by Carlsberg), Sabeco (Saigon Brewery) and Heineken NV.
Of these, the first three brands are dominating local markets (northern, central and southern regions), while Heineken beer products are dominating the mid-end and high-end market segments.
ThaiBev, which runs one of the largest supermarket chains in Vietnam and holds 53 percent of shares in the largest Vietnamese brewers, is expected to bring Chang beer, a brand well known in the Thai market, to Vietnam and make Chang a rival here. Singha, another well-known Thai brand, has spent $1.1 billion to buy Masan Consumer shares in 2015.
Meanwhile, Kirin Holding’s spokesman in Tokyo has confirmed that Vietnam will be one of the key markets for the brewer in 2018 and the following years.
Vietnam consumes some 3.8 billion liters of beer yearly
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According to the plan, Sabibeco will increase its capacity to 1 billion liters per year by 2020. Once the Saigon-Long Khanh plant comes into operation, it will be the sixth beer manufacturing plant operated by Sabibeco. At present, the firm’s five beer manufacturing plants are focusing on improving the Sagota beer brand in both the domestic market and overseas markets.
With the plant, Sabibeco targets to become the leading brewer in the country in the next few years.
With an annual consumption of roughly 3.8 billion liters of beer, Vietnam is an attractive market luring in numerous foreign brewers, including Carlsberg, Heineken, and AB Inbev. These investors are determined to increase their market shares via M&A deals.
Notably, in March, Cees’t Hart, chair cum general director of Carlsberg, arrived to Hanoi to look for specific plans to increase Carlsberg’s holding in Habeco.
In the framework of the visit, representatives of Carlsberg discussed with the Ministry of Industry and Trade (MoIT), Habeco, and relevant authorities the state divestment progress.
Along with Carlsberg, Heineken and AB Inbev also expressed ambitions to acquire Habeco’s stakes to increase their market share in Vietnam.
Another foreign brewer wanting to increase its presence in Vietnam is Thai Beverage (Thaibev). Accordingly, after acquiring a 53.59 per cent stake in Sabeco, Thaibev announced plans to sell between 1.85 and 2 billion litres of beer and increase Sabeco’s market share to 50 per cent this year.
In its report released last year, Euromonitor International predicted that Vietnam will be the next major battlefield for brewers.
“While volume sales are struggling in the leading markets, SE is forecast to see absolute volume growth of 2.3 billion liters over 2016-2021, led by Vietnam,” the report says.
While the average beer consumption volume in the world hasn’t increased over the last decade, sales in Vietnam have been soaring steadily. In 2008, Vietnam ranked eighth in Asia in beer consumption. Eight years later, it jumped into the third position, just after Japan and China.
According to Ban Viet Securities (VCSC), the Vietnamese beer market is controlled by four big manufacturers, namely Habeco (Hanoi Brewery), Hue Brewery (100 percent owned by Carlsberg), Sabeco (Saigon Brewery) and Heineken NV.
Of these, the first three brands are dominating local markets (northern, central and southern regions), while Heineken beer products are dominating the mid-end and high-end market segments.
ThaiBev, which runs one of the largest supermarket chains in Vietnam and holds 53 percent of shares in the largest Vietnamese brewers, is expected to bring Chang beer, a brand well known in the Thai market, to Vietnam and make Chang a rival here. Singha, another well-known Thai brand, has spent $1.1 billion to buy Masan Consumer shares in 2015.
Meanwhile, Kirin Holding’s spokesman in Tokyo has confirmed that Vietnam will be one of the key markets for the brewer in 2018 and the following years.
