ThaiBev confirms it is looking into buying up shares in Singapore firms

Charlotte Dhonavanik, ThaiBev’s vice president of office of corporate communication, said the Singapore-listed company was in talks to acquire stakes in the two firms from Oversea-Chinese Banking.
ThaiBev submitted a filing to Singapore Exchange yesterday stating that it was in discussions to explore possibilities but added that no definitive binding agreement had yet been entered by the company to acquire the shareholdings, and that there was no certainty or assurance the transactions would materialise.
OCBC and its subsidiary GEH also told the exchange that they had been approached with an offer to purchase, among other things, their combined 18.2-per-cent stake in Fraser and Neave and combined 7.92-per-cent holding in Asia Pacific Breweries.
The acquisition will satisfy the thirst of ThaiBev, Thailand’s largest whisky producer, to expand its presence overseas. With strength in food and beverages as well as other interests, F&N is present in more than 20 countries spanning Asia, the Pacific, Europe and the US, and employs more than 17,000 people worldwide.
Brewers including Asahi Group Holdings and Kirin Holdings Co have said they are targeting takeovers in Southeast Asia, where young populations and growing economies are spurring beer sales.
“If you look at beer makers’ profitability, the more share they have, the more margin they get,” Masashi Mori, an analyst at Deutsche Bank in Tokyo, told Bloomberg. “So both internally and externally, expansion is the tried and true tactic for beer makers.”
Kirin, Japan’s largest brewer by market value, bought 14.7 per cent of F&N two years ago for 1.34 billion Singapore dollars (Bt33.7 billion). F&N owns 40 per cent of Asia Pacific Breweries, the maker of Tiger beer and local bottler of Heineken. Heineken NV, the world’s third-largest brewer, owns a 42-per-cent stake in the bottling company. Heineken on Tuesday said it was actively considering options, upon learning about the news.
In a separate matter, Thai Beverage Logistics (TBL), a ThaiBev unit, will invest about Bt1.1 billion in developing two new major distribution centres in Kamphaeng Phet and Khon Kaen provinces within the next two years.
The move is in line with the company’s plan to strengthen its logistics facilities to cash in on the implementation of the Asean Economic Community (AEC), which will broaden its business opportunities into markets with potential, including Vietnam and Myanmar, by taking advantage of lower distribution costs.
Founded in 2008, TBL plans to reduce its overall logistics costs by about 10 per cent per annum. The company distributes between 1.6 billion and 1.7 billion litres of alcoholic and non-alcoholic beverages for ThaiBev per annum.
The investment is part of the company’s five-year plan, adopted three years ago, to invest more than Bt2.5 billion in opening distribution centres and major warehouses in all regions of the Kingdom.
TBL chairman Wanchai Sara-thulthat said the company had already invested Bt1.4 billion in the opening of three distribution centres and warehouses, in Nakhon Ratchasima, Chon Buri and Surat Thani.
“What we have done is to support the strength of Thai Beverage in consolidating all small warehouses, which were previously in the charge of sales staff at all branches throughout the country. There are about 80 small warehouses located at the branches, and that number will be consolidated and reduced to utilise our costs better and allow sales people to concentrate on sales activities,” he said.
The newly announced Bt1.1-billion investment will be allocated to the new major warehouses and distribution centres in Kamphaeng Phet and Khon Kaen, as well as to sub-distribution centres in Chiang Mai and Lamphun, he said.
“With the distribution centres, we will be able to reduce the distribution lead-time of Thai Beverage’s products from three days previously to about a day and a half.
“We are in charge of beers, liquors and non-alcoholic beverages, which generate sales of more than Bt100 billion for Thai Beverage every year,” Wanchai said.
“We also want to convert ourselves from a cost centre to a profit centre in the near future, with our business ambition being also to provide a logistics and distribution service for products made by outside vendors,” he said.
“We also plan to set up warehouses and distribution centres in potential markets in the region to cash in on the upcoming AEC’s development,” he added.
TBL employs more than 4,000 staff.