Heineken expands production, buys into local top brewer in Vietnam

By VnExpress   December 2, 2016 | 09:08 pm PT
The beer maker is aggressively pouring money into Vietnam, one of the biggest markets in Asia-Pacific.

As Heineken considers Vietnam a vital driver for its business growth in Asia-Pacific, the Dutch beverage giant is trying to grasp more market share.

Heineken in July took over a facility from rival Carlsberg in the southern port city of Vung Tau in an attempt to boost its brewing capacity to satisfy the thirst of local drinkers who, according to Euromonitor International, are expected to consume more than 4.04 billion liters of beer this year, the most in the region and up from 3.88 billion liters last year.

The Amsterdam-based company has planned to boost its capacity at the Vung Tau facility to 610 million liters from 50 million liters, the Nikkei Asia reported.

Heineken, which entered Vietnam in 1991, currently operates in the market through two companies, including wholly-owned Asia Pacific Breweries and Vietnam Brewery, in which Heineken has a 60 percent stake.

It is now the second biggest brewer in Vietnam controlling 25 percent of the local beer market, after dominant player Sabeco, which has 40 percent of the market.

Heineken, which positions itself on the market as the brewer of high-end beers, has increased its annual output by 14 percent since 2012, which is more than twice the output growth rate of Sabeco, the Nikkei Asia reported, citing data from local securities company Viet Capital.

Heineken produced 729 million liters last year, compared to Sabeco’s 1.38 billion liters.

As part of its expansion plan, Heineken plans to buy into Sabeco as the government is divesting from the top local brewer.

Heneiken is seen among potential investors keen to aquire more shares in Sabeco, a 90 percent state-owned company due to be listed in Ho Chi Minh City on December 20 at the latest. Heineken is reported to have already owned 5 percent in Sabeco.

The Vietnamese government on July 20 scrapped a long standing foreign-ownership cap in many listed companies, but the 49 percent limit stays put for Sabeco.

In the latest privatization push, the government will sell a 53.6 percent stake in Sabeco this year and the remaining in 2017.

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