Sabeco targets 50 per cent market share this year

Sabeco targets 50 per cent market share this year

After acquiring 53.56 per cent stake in Saigon Beer, Alcohol and Beverage Corporation (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.

This was announced by Koh Poh Tiong, chairman of F&N—a member company of Thai Beverage Public Company Limited (ThaiBev)—at Sabeco’s meeting to summarise the business results of 2017 and the development plan for 2018.

“Being the large shareholder of Sabeco, we will support the corporation to become the leading brewer in Vietnam. We will take Sabeco’s products into F&N’s distribution system in Vietnam and other countries, and simultaneously increase Sabeco’s beer sales in Singapore, Thailand, and Vietnam,” Tiong stated.

With its experience and success in beer production, ThaiBev is considered sufficiently armed to realise the above targets. Notably, Sabeco alone owns 26 manufacturing plants, 10 trading subsidiaries, and 37 branches with 1,200 first-tier beer distributors nationwide.

Meanwhile F&N, especially ThaiBev, is holding either large or controlling stakes in large-scale Vietnamese firms like Vinamilk, Metro Cash & Carry Vietnam, Phu Thai’s distribution system, as well as five-star Melia hotel.

In 2017, Sabeco reported beer consumption at 1.727 billion litres and an increase of 11 per cent in revenue. The corporation’s pre-tax profit was VND5.84 trillion ($257.2 million), coming from holding 40 per cent of the beer market. According to experts, in 2018, Sabeco only needs to rearrange its management board and governance methods towards transparency to acquire 1.5 times as much profit than it had in 2017.

Contrary to Sabeco’s positive business results and hefty targets, Hanoi Beer, Alcohol and Beverage Corporation (Habeco), reported bleak business in 2017. Notably, last year, Habeco only produced 675.7 million litres of beer with a pre-tax profit of VND952 billion ($41.9 million), decreases of 48.3 million litres and VND25.3 billion ($1.1 million) compared to 2016.

According to Nguyen Manh Hung, director of Habeco, the bad weather impacted the company’s revenue and profit. Besides, the increasing presence of Habeco’s competitors like Heineken and Sabeco also contributed to decreasing market share and business performance.

This year, Habeco targets to produce 699.2 million litres of ber, up 4.3 per cent on-year, and to ear VND995 billion ($43.8 million) in pre-tax profit, up 0.3 per cent on-year.

Earlier on December 18, Vietnam Beverage (49 per cent controlled by ThaiBev), won an auction to acquire 343.6 million shares, equivalent to 53.5 per cent, of Sabeco at VND320,000 ($14.09) apiece.

This was the largest share sale in Vietnam to date and possibly the largest in Asia throughout the year.

Vietnam Beverage is wholly-owned by Vietnam F&B Alliance Investment JSC, which is in turn indirectly owned by Beer Co., Ltd., a Hong Kong-based company wholly-owned by ThaiBev.

vir