Ageing Thais prompt Boon Rawd brewer to shift focus
THE PEAKING of per capita consumption of alcohol and the ageing of society in the home market have propelled Boon Rawd, the brewer of Singha and Leo beer, to expand faster in neighbouring countries even though they are known to be nationalistic.
Chutinant Bhirombhakdi, executive vice president, said last week that Thailand has become a matured market, so the company has to increase its focus on non-core businesses such as real estate.
However, beer remains the core business for Boon Rawd, and the neighbouring countries hold substantial export potential for the company.
Boon Rawd ships its brews to 40 countries worldwide. Singha beer is recognised and accepted in the international market.
Exports are only 12-14 per cent of sales. The company wants to drive that up to 20 per cent in three to five years, starting with the CLMV countries of Cambodia, Laos, Myanmar and Vietnam because its scale is enough for the company’s capacity.
“Asean is too large for us because when we consider which countries we will go to, we have to ensure we can gain a market share of 30-35 per cent in each country, so CLMV is a proper area for us,” he said.
The company knows it has a challenge on its hands to gain market share in those countries from native beers.
Even in Thailand, well-known international brands have minor market shares because consumers prefer local beers.
To secure a foothold in CLMV, the company has many channels to choose from, such as acquisitions, greenfield investment or a partnership.
For example, in Vietnam, the company is among the companies bidding for Saigon Beer Alcohol Beverage (Sabeco), which is owned by the Vietnamese government.
The Vietnamese government wants to privatise Sebeco, the brewer of Saigon beer, by selling its shares. Local breweries are likely to have more advantages than foreign companies in winning a bid.
Restaurant chain in Europe
For non-core businesses, the company recently acquired a restaurant chain in Europe.
Chutinant, who is also chairman of Singha Estate, a property arm of Boon Rawd Group, said the group is always looking for an opportunity to acquire property in Europe.
The company’s expansion in Europe is partially financed by cash on hand and partially by bank loans. Mobilising funds through the capital market is one of the considerations of the group.
Boon Rawd had planned to list its packaging subsidiary – Bangkok Glass Industry – but decided against the move.
Now the company is reviewing the plan again.
The company will probably end up listing the unit as a solution to mobilise funds.
Last year, the group acquired a listed property company – Rasa Property Development – and renamed it to Singha Estate under the ticker symbol “S”.
