San Miguel Brewery Inc. is looking at the possibility of acquiring existing breweries or putting up a bigger brewery in Vietnam to boost its existing capacity in the country which has a per capita beer consumption that is more than double that of the Philippines.
In an interview after the firm’s annual stockholders’ meeting, SMBI Chairman Ramon S. Ang said that, “if we are putting up a new plant, it will have a capacity of at least 2 million hectoliters with an investment of about $70 million.”
According to a report on Philippine News, Ang said SMBI already has a small plant in Ho Chi Minh but the capacity is only at 200,000 hectoliters.
“It just a quarter of our plant in Bacolod,” noted SMBI President Robert Huang.
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“We have an over capacity in some countries, except Vietnam. That is why we are looking at some breweries that we can buy in the future,” added Huang.
Ang noted that, while the per capita consumption in the Philippines is about 19 liters of beer a year, in Vietnam, the figure is at around 44 liters.
He said they are currently conducting a market study and will begin construction of the plant as soon as the study is completed. The new plant will be built on the 200 hectare property where the first plant is also located.
Ang said SMBI will also continue to invest in the Philippines where there is also an uptrend in beer consumption.
“Along with expanding our capacities, we will increase availability and visibility of our brands in all trade channels, while pursuing cost improvements and operational efficiencies,” he said.
SMBI is committed to sustain the growth momentum it has built over the past years despite challenges posed by the implementation of higher excise taxes, stricter government policies on the environment, and possible regulations on alcohol consumption.
Vietnam is considered to be one of the region’s most attractive markets for foreign investors with a steadily increasing GDP and booming foreign direct investment, a pattern which is forecasted to remain stable in the upcoming years.
Vietnam is considered to be one of the region’s most attractive markets for foreign investors with a steadily increasing GDP and booming foreign direct investment, a pattern which is forecasted to remain stable in the upcoming years.
With a forecasted annual growth rate of 6% to 2020, the beverage industry in Vietnam is amongst the highest growth fast-moving consumer goods industries. Beverage consumption is estimated to reach 81.6 billion litres in 2016 with an outlook to reach 109 billion litres in 2020. Though receiving a humble compound annual growth rate (CAGR) of 3.5% until 2020, the beer sector in Vietnam is considered to have immense opportunities for investment as the country’s consumption is in the top 10 of Asian region and has a favorable per capita consumption at 42 litres in 2020. Wine and spirits and nonalcoholic drinks sectors are also forecasted to have an 8%- and 6.1%-CAGR respectively.