For­eign firms eye Viet­nam’s state brew­ers

The Myanmar Times - - International Business -

BEER is Viet­nam’s tip­ple of choice and now its cash-strapped govern­ment is draw­ing on the na­tion’s pen­chant for lager to raise bil­lions of dol­lars by sell­ing stakes in state-owned brew­ers.

The un­prece­dented di­vest­ments in two state crown jew­els, the mak­ers of the much-glugged Saigon and Hanoi beers, are ex­pected to net as much as US$2.2 bil­lion.

The sale comes as part of long­promised re­forms to pri­va­tise bloated state firms, which of­fi­cial fig­ures show con­trib­uted about one-third of the coun­try’s GDP last year. It is hoped the re­forms will set the com­mu­nist coun­try back on track to meet its am­bi­tious eco­nomic tar­gets and jump­start growth which has slowed this year.

For Viet­nam’s govern­ment, beer is a log­i­cal place to start. With a pop­u­la­tion of 93 mil­lion peo­ple, the coun­try PXP Viet­nam As­set Man­age­ment is one of Asia’s lead­ing swillers of beer.

Viet­namese con­sumed more than 3 bil­lion litres of the cold stuff last year, ac­cord­ing to Euromon­i­tor mar­ket­ing firm. That thirst has piqued in­ter­est from for­eign brew­ers, ea­ger to tap growth mar­kets at a time when sales in many de­vel­oped mar­kets in Asia are fore­cast to plateau.

“Viet­nam has one of the fastest­grow­ing beer con­sump­tion mar­kets in the world, and that’s ob­vi­ously an ap­peal,” said Kevin Snow­ball, CEO of PXP Viet­nam As­set Man­age­ment in Ho Chi Minh City. The govern­ment said this month the two com­pa­nies, Habeco and Sabeco, would be listed in the first three months of 2017 and would be open to lo­cal or for­eign bid­ders.

Heineken al­ready has about 17 per­cent of the mar­ket, com­pet­ing with play­ers like Carls­berg and Sap­poro. Re­ports say Thai­land’s ThaiBev and Singha Beer may now be ready en­ter the fray too.

But the sales could in­stantly trans­form a for­eign buyer into a top brewer: Sabeco en­joys about 45pc mar­ket share, while Habeco has 17pc, ac­cord­ing to Euromon­i­tor. The govern­ment says it will sell its 90pc stake of Saigon Beer Al­co­hol Bev­er­age Corp for $1.8 bil­lion, and its 82pc stake in the Hanoi Beer Al­co­hol and Bev­er­age Joint Stock Corp for $400 mil­lion. –

‘Viet­nam has one of the fastest-grow­ing beer con­sump­tion mar­kets. ’

Kevin Snow­ball

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