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Vietnam Food and Drink Report Q2 2008Published by: Business Monitor International Published: May. 1, 2008 - 69 Pages Table of Contents
AbstractYet another flurry of activity in Vietnam’s fledgling, but high-growth beer market has been witnessed thisquarter with almost all of the industry’s leading players announcing growth plans. In BMI’s newlypublishedQ208 Vietnam Food & Drink Report, we examine exactly what is drawing investors to whatremains a low return market at the present time, even if the long-term outlook for the industry is bright.Since the turn of the year, Vietnam’s beer industry has witnessed market leaders Sabeco and Habecoannounce fund-raising initial public offerings (IPOs), only for Habeco to postpone its listing afterSabeco’s ended up only 61% subscribed. Sabeco’s performance was not, however, perceived to indicateweaknesses in the company or the beer industry itself; rather it was viewed as a consequence of generalmarket weakness and low investor confidence. This take is certainly supported by the flood of externalinvestment the beer industry has received of late.February 2008, saw UK major Scottish & Newcastle (S&N) receive its first licence for a breweryconstruction in Vietnam, with Long An province the chosen site. The impact of this news should yetstretch to Carlsberg who looks set to acquire S&N’s Vietnamese business as part of a post-takeover assetsplit with acquisition partner Heineken. With Carlsberg also looking likely to increase its 10% stake inHabeco, when the latter’s second-round privatisation gets under way, Vietnam’s beer competitivelandscape could yet receive quite a shake-up. Add to this mix March’s news that Asia Pacific Breweries(APB), Heineken’s regional joint venture, had boosted output at its Hatay Brewery Limited by 50% in abid to facilitate expansion and that Japan’s Kirin was considering following up its Vietnamese soft drinksforay with the pursuit of a strategic partnership in the brewing sector, and Vietnam’s beer market issuddenly more dynamic than ever before. Attracting this investment and facilitating this dynamism are Vietnam’s sound macroeconomicfundamentals, not to mention of course a bright outlook for beer consumption. BMI is forecasting volumesales growth of 61.1% in Vietnam’s beer market to 2012, a figure that outstrips wider alcoholic industryvolume growth of 60.4%. Underpinning this is an expectation that GDP will grow by 8.1% annually to2012, supported by strong FDI inflows and in part by steady population growth of 7.1% to 92.7mn in2012. Urbanisation will also serve to boost consumption across all consumer goods industries with BMIforecasting that Vietnam’s urban population as a percentage of its whole will increase from 26.7% in2005 to 43.2% in 2030. Of course low existing spending levels, and a corresponding preference for premium beers, must be takeninto consideration when pouring funds into Vietnam’s beer industry. However, with the long-termpromise of this market barely in question, no ambitious player can afford to be left behind. Get Full Details About This Report >> |
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