Food-and-beverages firm Malee Group is investing Bt330 million in its first foreign acquisition, Long Quan Safe Food Joint Stock Company (LQSF), a major beverage producer in Vietnam.
The acquisition will increase Malee’s production base for emerging markets in Southeast Asia, helping to drive the proportion of the company’s foreign revenue, currently at 40 per cent, to 60 per cent over the next three years.
“With this acquisition, we are taking 65-per-cent ownership of the company,” said senior vice president Opas Lopansri. “This will enhance our competitive advantage in serving the needs of middle-to-lower-income consumers in the region. This acquisition is part of Malee’s strategy to tap into overseas markets, helping to achieve our mission of becoming a health-driven global F&B firm by 2021.”
Long Quan Safe Food’s strengths are a good fit for Malee.
LQSF has been in business for 25 years and its products are well accepted among consumers. And integrated production can produce 300 million litres of beverages per year in a high-quality and cost-effective manner.
LQSF produces water, carbonated soft drinks and jelly drinks in cans, PET bottles, plastic cups and glass bottles.
The acquisition will increase Malee’s total production capacity to 630 million litres per year.
It will help ensure competitive pricing, essential for success in the region’s emerging markets, and will bring wide distribution in Vietnam, setting Malee apart from its competitors.
“Malee Group has been establishing partnerships overseas over the past three years to tap the tremendous growth potential of the regional beverage market,” Opas said. “For emerging markets, we have partnered with local companies that not only understand what consumers want, but also have strong distribution capabilities covering the majority of their respective markets.
“We have joint ventures in the Philippines as Monde Malee Beverage Corp and in Indonesia as PT Kino Malee (Indonesia). By acquiring this stake in LQSF, we continue to utilise the strengths of our partners in each country to build a strong regional network, which will in turn allow us to strengthen the competitiveness of our joint ventures as part of our Asean strategy.
“We are confident this acquisition will greatly benefit our international business, as we establish LQSF as a manufacturing hub serving mass-market consumers in Vietnam, Thailand, the Philippines, Indonesia and our other key markets in the region. We expect this acquisition to help increase the proportion of our revenue from foreign markets, and consider our international business to be the key growth engine for Malee Group moving forward.”