Vietnam/Thailand: ThaiBev’s bet on Sabeco is paying off

ThaiBev’s recently released figures make clear that its $4.84 billion bet on Vietnam’s beer market leader Sabeco is paying off. For the quarter ended December 31, 2018, the Vietnamese subsidiary reported sales of VND13 trillion (USD560.58 million) and contributed nearly one fourth of ThaiBev’s total revenues of VND54.28 trillion (USD2.34 billion). Full year sales for Sabeco were VND54.28 trillion (USD2.34 billion) with a net profit of VND5.54 trillion (USD238.9 million).

The controlling stake of 53.6 percent in Sabeco which ThaiBev acquired in December 2017 (, 18.12.2017) has also increased ThaiBev’s share of the beer market in all 10 countries of The Association of Southeast Asian Nations (ASEAN ) to 24%.

Beer products drove ThaiBev’s revenues for the first time. Because of the additional business and a strong performance of the company’s beer wing, sales in this category went up to VND24.84 trillion (USD1.07 billion), which was about 46 percent of the total business, while the share of ThaiBev's traditional business in spirits went down from 54 percent to 43 percent, despite also an exceptional performance.

ThaiBev started in 1977 as a producer of spirits and build its first brewery in Thailand in 1994 in order to break the monopoly of Boon Rawd with its flagship brand Singha. One year later ThaiBev launched Chang Beer and formed a 50-50 joint-venture with Carlsberg which was dissolved eight years later in 2003 after the two sides failed to resolve their disagreements.

Through further growth of the beer market in Vietnam, which is expected to increase by 5 to 6 percent a year and optimization of production processes and synergistic benefits of procurement with Chang Beer, experts see a further potential for a profit growth in the medium to long term.

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