ThaiBev to expand SE Asia operations under 7-billion-baht investment plan
ThaiBev has announced it will expand manufacturing operations across Southeast Asia with a three-year investment plan worth 7 billion baht.
CEO and group president Thapana Sirivadhanabhakdi announced the plan on Tuesday as part of the company's annual report, which showed a resilient performance for the nine months ending June 30.
Thapana said the investment budget will sow new seeds to sustain growth in each of ThaiBev’s four business units: spirits, beers, non-alcoholic beverages, and food.
It will cover factory construction, machine capacity upgrade, automation, and environmentally friendly transformation to achieve sustainability goals.
Thapana also ruled out more mergers and acquisitions, stating that subsequent strategic growth will be achieved through a comprehensive partnership.
About 4 billion baht of the investment budget will be spent on ThaiBev’s Cambodia project, while the remainder will be distributed to upgrade projects in Vietnam, Laos, Myanmar, and China.
The group’s spirit unit recorded healthy growth in profits, driven by expansion of ThaiBev’s portfolio of premium spirits brands and strengthening of international routes to market via the acquisitions of Larsen Cognac and Cardrona Distillery.
The unit increased sales revenue by 3.3% year on year to 93.673 billion baht, despite total sales volume decreasing by 3.5% on the previous period.
ThaiBev’s Beer Product Group also recovered following the resurgence of economic activity and the return of tourists. However, business in Vietnam has continued to face challenges from weak consumption amid macroeconomic headwinds.
Overall sales revenue increased by 0.7% to 93.262 billion baht, despite a 5.2% decrease in total sales volume. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 19.8% to 10.783 billion baht due to increased brand investment, marketing activities, and competitive pressures, as well as rising key raw material and packaging costs.
The company’s Non-alcoholic Beverages unit increased sales revenue by 15.6% year on year to 14.822 billion baht, boosted by an 8.7% increase in sales volume amid higher consumption. Under the F&N brand, the group's core products include green tea, still water, carbonated soft drinks, and dairy drinks. EBITDA rose by 3.3% to 1.773 billion baht.
The company said it continues to see positive growth opportunities in the Asean region.
ThaiBev’s Food Business said it saw recovery in Thai restaurant dine-in traffic, which is now close to pre-pandemic levels as locals resumed eating out with families and friends and tourists began to return.
A key growth engine for the food industry this year will be deepening its penetration across the country and expanding the number of stores across its food brands to ensure that consumers can easily access their favourite restaurants and products, it said.
ThaiBev now operates 771 food outlets in Thailand, with 43 new store openings in the nine months ending in June.
"The Group intends to expand same-store sales growth through new menu innovations," it said.
Overall, the food business registered a 19.2% year-on-year increase in sales revenue to 14.296 billion baht. However, EBITDA decreased 8.4% to 1.446 billion baht following rising costs of raw materials, utilities, and labour, as well as the pre-opening expenses to facilitate new store expansions.
ThaiBev reported total sales revenue of 215.893 billion baht, a 3.8% increase year on year. Improved sales revenue contribution from all business segments boosted sales revenue, driven by an overall improvement in economic activity and the recovery of Thailand's tourism industry.
EBITDA was 37.765 billion baht, a 3.4% decrease year on year, after accounting for revenue growth, increased brand investment and marketing activities, and cost-push factors. The group said it maintained a strong free cash flow and a healthy financial position.
ThaiBev is Southeast Asia's leading beverage producer and distributor, as well as Thailand's largest. The group operates 19 distilleries, three breweries, and 20 non-alcoholic beverage production facilities in Thailand, and is supported by a large distribution network with over 500,000 points of sale.
Meanwhile, the company operates in over 90 countries, with five production facilities in Scotland, one Larsen Cognac and eau-de-vie production facility in France, one distillery in New Zealand, two production facilities in Myanmar, and one distillery in China.
