Market share may drop, but Lao brewery poised for growth
Market share may drop, but Lao brewery poised for growth
The establishment of a free trade area in the region may affect market share, but the Lao Brewery Company's business is certain to show growth, according to the managing director.
“It should be understood that we will not be able to maintain our current share of the domestic market, but the certainty is that we will grow,” said Mr Kissana Vongxay in an interview with the Vientiane Times . He was speaking about the company's preparedness for the establishment of the Asean Economic Community in 2015.
He gave the interview on Wednesday when attending a dialogue meeting between the leaders of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy countries and the business sector.
Mr Kissana explained that when the free trade area comes into operation, goods from other countries will flow into Laos but at the same time, if the company is prepared in terms of both quantity and quality, it will be ready to face the competition.
The brewery has a 98 percent share of the domestic market.
Beerlao is exported to 20 countries including 10 in Southeast Asia. The company plans to expand export volume to five percent in the next three years from the current level of 1.5 percent.
Mr Kissana said it was not profitable to export heavy goods, so they will attempt to market the product brand with a view to establishing production bases overseas.
“Transportation costs swallow up any profit in exporting heavy goods, so our objective is to promote our brand so that we can produce Beerlao overseas.”
Mr Kissana said the com pany was not afraid of world famous brands penetrating the domestic market, but they need to be better prepared for when this happens.
He explained that each brand has its strength, so it is inevitable that Beerlao will not be able to maintain a 98 percent market share, but overall sales numbers should increase.
The compa ny is focusing on building its capacity in both infrastructure and personnel development in the belief that this will help to ensure its competiveness.
Lao Brewery Company Co., Ltd. is a joint venture between the Lao government, holding 49 percent, and foreign investors holding 51 percent of the shares.
According to Mr Kissana, following the government's policy to open up to more shareholders, the company is now a tripartite joint venture with the foreigners still holding the same 51 percent, the Lao government dropping to 29 percent and Lao businessmen holding the remaining 20 percent.
vientiane times
