Thai Beverage looks to food expansion in Asean 

Corporate October 09, 2017 01:00

By   KWANCHAI RUNGFAPAISARN
THE NATION

THAI BEVERAGE PLC (ThaiBev) has set the goal of doubling to tripling revenues from its food operations by 2020, said Nongnuch Buranasetkul, CEO for the company’s food business in Thailand.



The target is in line with the group’s “Vision 2020”, which sees an Asean-wide stable and sustainable leader across the food and beverage industries.

The growth target would be achieved by focussing on key op-portunities for internal growth, including through the expansion of stores, business platforms and portfolio, as well as the launch of new innovations, mergers and acquisitions. The food group would also enhance its internal operational efficiency to improve the bottom line.

Nongnuch noted ThaiBev’s 2008 acquisition of Oishi Group, a local leading Japanese restaurant chain. This year, the group established a new subsidiary, “Food of Asia”, to focus on non-Japanese Asian cuisine. The food group had also recently focused on expanding its portfolio to include multiple food channels from street foods, to quick service restaurants, casual dining, fine dining, and cake and bakery shops. They include restaurant brands So Asean, Oishi Eaterium, Oishi Grand, Hyde & Seek, and Man Fuyuan Kitchen.

The food group posted about Bt6 billion in revenue in fiscal year 2016, ending September last year.

ThaiBev posted Bt142.4 billion in sales revenue in the first nine months of fiscal year 2017, ending June this year, down 6 per cent compared to the same nine-month period of fiscal year 2016. Though revenues were down, the group achieved a 3.1 per cent increase in net profit to Bt21.1 billion for the same period. The group’s EBITDA also increased by 0.9 per cent in the first nine months of this fiscal year to Bt29.04 billion. 

“Similar to the beverage groups, both alcohol and non-alcohol products, [the food group] would like to explore beyond Thailand to all potential markets in Asean,” said Nongnuch.

Edmond Neo Kim Soon, CEO for the company’s beer products group, said beer already had a strong foothold in Thailand and the company is now exploring opportunities beyond Thailand, with an initial focus on Asean markets. Initial target consumers are in Cambodia, Singapore, Vietnam, Hong Kong, and the United Kingdom.

“To be in line with the group’s 2020 vision, we aim to become the number one beer player in the homeland of Thailand as well as the number one in Asean in term of sales volume,” Soon said.

Lee Meng Tat, CEO for the non-alcoholic beverage product group, said his group is now operating in six Asean countries and exports to the other four markets in the region.

“Our core markets for non-alcoholic beverage products are Thailand, Malaysia, and Singapore, with the three new markets of Myanmar, Vietnam and Indonesia where we have sales operations. We also have trading markets – Myanmar and Vietnam – where we have supplied our products through Thailand. We have also supplied our non-alcoholic beverages to Brunei and the Philippines through Fraser and Neave (F&N) operations in Malaysia and Singapore.

He said the company will focus on five non-alcoholic brands within Asean including carbonated drinks, 100 Plus isotonic drink, Oisi green tea, NutriSoy soya milk, and Magnolia dairy products.

Thapana Sirivadhanabhakdi, president and CEO of ThaiBev, said that the group in December last year set up wholly-owned subsidiary, BevTech, to focus on adopting engineering and robotic technologies to increase efficiency in its bottling process.

According to Thapana, ThaiBev capital expenditure for the fiscal year 2018, starting from October this year to September next year, will reach Bt7.4 billion, up from the Bt5.2 billion allocated for fiscal 2017. 

The investment will be allocated to building new bottling lines for drinking water as well as improving production efficiency for current beverage products.