Thai investors have eyes on sell-off of Vietnamese state firms

By Nikkei Asian Review   September 24, 2016 | 04:30 pm PT
Some of the biggest companies from Thailand are ready to grab stakes in Vietnam's top state-owned enterprises, a report says.

The Vietnamese government’s plan to sell off its stakes in major state-owned enterprises (SOEs) are being watched closely by investors from Thailand, who are especially interested in the beverage sector, according to the Nikkei Asian Review.

The target is to fully divest state ownership from these companies by the end of 2017, “exciting foreign companies looking to tap strong demand in this previously inaccessible market of 93 million people,” the Nikkei Asian Review reported.

One of the largest corporations in the country, Vinamilk, is set to be the first in line with a 9-percent stake reportedly up for grabs.

The dairy giant is one of the best earners for the sovereign wealth manager State Capital Investment Corporation (SCIC), bringing in $100 million in dividends annually.

Among the most ambitous suitors is Thai Beverage, better known as ThaiBev. Its CEO, Thapana Sirivadhanabhakdi, was quoted as saying that Vietnam is the first priority of the company's M&A targets.

Its competitor Fraser & Neave, owned by Thailand's richest man Charoen Sirivadhanabhakdi, has also expressed interest in Vinamilk.


Vietnam's beer market is one of the most attactive sectors for foreign investors. Photo by Reuters/Kham

Saigon Beer Alcohol Beverage, or Sabeco, is also attracting foreign investors. Beer consumption in Vietnam rose 10 percent in 2015 to reach 3.4 billion liters and Vietnam may surpass Japan as Asia’s second largest beer market in the next decade.

Sabeco occupies 40 percent of the Vietnamese beer market and its shares are sought after by Thailand’s Boon Rawd Brewery along with Asahi Group Holdings, Kirin Holdings and Anheuser-Busch InBev.

Meanwhile, Siam Cement, Thailand's largest materials conglomerate, is eying plastics producers Tien Phong and Binh Minh. The Vietnamese plastics market is growing at 20 to 25 percent annually, according to the Ministry of Industry and Trade.

Vietnam’s government is speeding up the process of selling shares in state-run companies. The Southeast Asian nation had around 800 SOEs at the end of last year. In the first seven months this year, the government offloaded stakes in 60 of those, earning more than $233 million.

Related news:

> Vietnam taps banks to advise on $900 mln Vinamilk stake sale: sources

> Vietnam to divest from dairy giant Vinamilk in privatization push

> Vietnam's top brewer Sabeco seeks listing on HCMC bourse

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