To tap into a market which could grow by 40% by 2019, Japanese beer maker Sapporo International has decided to acquire controlling stake in the Sapporo Vietnam which is valued at $39 million after the company’s CEO decided to let go of the beer brand but make a significant investment in a tobacco business. The sapporo Vietnam is now a wholly owned foreign firm after the dismantling of the JV.
Sapporo International Inc, Japan’s oldest beer brand, has acquired its Vietnam-based joint venture Sapporo Vietnam, by taking over 29 per cent of the JV from the Vietnam National Tobacco Corporation (Vinataba). With this, Sapporo Vietnam has become a Japanese wholly owned company since September 9, 2015, according to an announcement by Vinataba. Sapporo Vietnam, a company with a $39 million charter capital, was launched in 2011 in the Viet Hoa – Duc Hoa 3 Industrial Park in southern province Long An. The manufacturing facility is designed with an initial capacity of 40 million litres a year and is expected to reach 150 million litres by 2019.
On October 2, 2015, the Nikkei reported that the Japanese brewer will try for a 70 per cent increase in the number of local stores and restaurants carrying its premium brew, which currently focus on the southern market of the country. Also according to the report, the money that Sapporo International Inc had to spend to buy the 29 per cent stake might reach $8.28 million, which accounts for over 21 per cent of the JV’s registered capital.Tapping into a market that could grow by 40 per cent by 2019, according to a Euromonitor report, Sappora Vietnam managed to record a 34 per cent sales increase in 2014. Meanwhile, Vinataba has also recently fully offloaded its stake worth VND16.7 billion ($745,500) in Sabeco Quang Ngai JSC. This is in alignment with the Vietnamese government’s move to urge state-owned companies to divest from non-core businesses.
“As we have built a good partnership over the years, Vinataba and Sapporo International Inc commit to continue cooperation and support to each other in the coming years,” Vinataba said in the announcement, even as the partnership in the joint venture ended. While it continues the divestment from the beer industry, Vinataba has beefed up its tobacco business by acquiring 30 per cent of Da Nang Tobacco JSC for VND56.6 billion. Vinataba has 19 subsidiaries, six affiliate firms and three joint ventures (including the Sapporo Vietnam) as of the end of 2014. In the last fiscal, it achieved a revenue and profit after tax of VND21.67 trillion and VND805 billion, respectively.
Source: DealStreet Asia