Thai Beverage vows to overhaul Sabeco following $5-billion takeover
Thai Beverage vows to overhaul Sabeco following $5-billion takeover
Thai Beverage drafts out various plans to revamp Sabeco, right after it takes up dominant roles at the latter’s management board today.
The 2018 general meeting of Sabeco this morning is a significant one, as it marked the debut of Thai Beverage as Sabeco’s controlling shareholder.
As expected, four representatives from the Thai beer firm were elected to the seven-person board, and Koh Poh Tiong, who hails from the Singaporean affiliate F&N, was named Sabeco’s chairman.
Vietnam’s Ministry of Industry and Trade (MoIT), who owns 36 per cent of shares, had two seats in the board. Lastly, Nguyen Tien Vy, deputy head of the Vietnam’s Beer – Alcohol – Beverage Association, became the only independent member in the board.
According to chairman Koh Poh Tiong, Sabeco will focus on slashing expenses to improve its business efficiency. Vietnam’s top brewery will collaborate closely with Thai Beverage to reduce material costs, as well as devising plans to trim logistics fees.
The Thai investor will also restructure Sabeco’s complex web of subsidiaries and affiliates, which amount to 36 companies in total.
“We will keep the Saigon Beer brand, as it is a national pride of Vietnamese people, and bring the brand to overseas markets via our region-wide distribution system,” said Koh.
Thai Beverage previously garnered backlash in Vietnam as some accused the investor of “erasing Vietnam’s heritage beer brand”.
At the meeting, Sabeco decided to scrap its foreign ownership limit, paving the way for the MoIT to divest its remaining stake there. There is no concrete timeline yet for the state divestment.
In 2018, Sabeco aims to reach VND4 trillion ($174 million) of post-tax profits, down by 19 per cent from 2017 due to anticipated tax hikes. The dividend payout ratio is slated to remain the same at 35 per cent.
As part of the revamping efforts by Thai Beverage, Sabeco will also replace its inspectorate committee with an internal auditing team, following in the footsteps of dairy giant Vinamilk. Koh Poh Tiong reckoned that this move will help Sabeco reach international standards of corporate governance.
It is noteworthy at 18 per cent of Vinamilk is also owned by Thai Beverage, via its affiliate F&N. Michael Chye Hin Fah, another representative of Thai Beverage in Sabeco’s board, is concurrently a board member at Vinamilk. Last year, Thai Beverage noted that it would use F&N as the main tool for mergers and acquisitions within ASEAN.
Following today’s meeting of Sabeco, Thai Beverage is now controlling two of Vietnam’s biggest food and beverage firms, an important milestone in its quest to take advantage of ASEAN’s rising consumption and growing middle class.
