Thai Beverage set to invest Bt15 billion as it chases premier position in the region
DRINKS CONGLOMERATE Thai Beverage's quest to become the market leader in Asean will see it invest up to Bt15 billion in a regional expansion over the next five years.
The Sirivadhanabhakdi family-owned group said Thailand’s sluggish economy would not affect its long-term business plans and it was confident the economy would turn around soon.
As part of it expansion, ThaiBev plans to create new products and encourage its agents countrywide to work hard to increase sales.
Thapana Sirivadhanabhakdi, ThaiBev group president and chief executive, said the company was driving it business in line with its 2020 vision.
He said the company planned to cash in on the tremendous economic growth potential in Asean as a result of the trade liberalisation that followed the implementation of many free-trade agreements.
“We believe in the potential of Asia, particularly Asean,” he said. “The combined GDP [gross domestic profit] of all member countries in Asia is as high as 80 per cent of the world’s GDP but most well-known international brands in the region are from the east, particularly Japan and South Korea.
“There are no brands from Southeast Asia, which has great potential to be successful and be able to raise its reputation in the international arena.”
ThaiBev posted 4.5 per cent growth in the first six months year on year, with revenue of Bt84.6 billion. Its net profit increased 8.2 per cent to Bt12.4 billion.
Its sales growth, however, was below the targeted 12-15 per cent for the whole of this year.
In tandem with its business expansion plans, the company will spend Bt5 billion annually over the next five years on the maintenance of its manufacturing facilities.
It has not set a budget for future mergers and acquisitions.
Thapana said the government’s economic stimulus measures – especially soft loans to small and medium-sized enterprises, the injection of funds to lower-income earners and public expenditure – had resulted in public and investor confidence in the economy increasing.
He said these measures should result in people’s spending power rebounding in the first quarter of next year.
ThaiBev has adopted five key pillars as part of its 2020 vision: growth, diversity, brand, reach and professionalism.
It will increase profits by increasing its income from non-alcohol beverages to 50 per cent of its total income by 2020 while also boasting overseas sales.
It will focus on diversifying its brands to meet consumer needs and keep expanding its logistic networks to reach targeted customers and cover domestic and foreign sales.
Another element of its 2020 vision is the cultivation of an atmosphere of professionalism within the company.
Ueychai Tantha-Obhas, CEO of ThaiBev’s Spirits Product Group, said the company was the largest maker of spirits in the world. He said it planned to develop brands that met with the sustainable growth pillar of its 2020 vision.
Brand development and making adjustments to doing business when necessary were key, he said.
He said ThaiBev had set up three subsidiaries under its Spirits Product Group: Horeca Management Co; Cash Van Management Co; and Modern Trade Management Co.
Horeca Management Co focuses on hotel and restaurant channels. Cash Van Management Co handles the distribution of products to 270,000 traditional outlets throughout Thailand, while Modern Trade Management focuses on business synergies and improving the company’s bargaining power with retailers.
Prapakon Thongtheppairot, CEO of ThaiBev’s Beer Product Group, said the company’s mission was to make Chang Beer the No. 1 beer in Thailand by 2020.
Prapakon said ThaiBev had created logistic networks in key Asean countries, such as Malaysia, Singapore, Cambodia and Myanmar.
He said Fraser & Neave, a subsidiary of ThaiBev, had sold its stake in Myanmar Brewery to Myanmar Economic Holdings but the deal had not significantly impacted ThaiBev’s beer business.
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