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Asean Affairs   14 February 2014

Beer firms rush to build factories

Vietnam: Despite ever-growing special consumption taxes on alcoholic beverages and the economic slump, across the country, the number of beer factories keeps on growing.

The investment boom in the beverages industry comes from the increasing enjoyment the Vietnamese find in drinking. Last year, the country consumed three billion litres of beer, or 32 litres per person.

Sai Gon Beverages Company (Sabeco), who currently leads the country in beverage production, have been steadily expanding for the past three years.

They have recently started construction on a VND450-billion Sai Gon – Can Tho Beer Factory with an annual production capacity of 50 million litres. They have also begun construction on the Sai Gon – Kien Giang Beer Factory with a total investment capital of VND600 billion (US$28.5 million), producing 50 million litres of beer every year.

Last October, Sabeco opened a new factory Sai Gon – Ninh Thuan Beer Factory, with an annual production capacity of 50 million litres. The company said this factory will be upgraded to facilitate an annual production capacity of 100 million litres in the coming years.

According to initial estimates, of the 24 projects they have invested in, 20 of them have been put into use, giving a production capacity of 1.8 billion litres of beer annually. In 2014 and 2015, the company plans to invest in three additional projects.

Four years ago, Ha Noi Beverages Company (Habeco) opened the Ha Noi – Me Linh Beer Factory, the second phase of which, currently produces 200 million litres of beer a year.

In 2011, Habeco opened the Ha Noi – Thai Binh Beer Factory, which produces 50 million litres of beer every year. The company has dozens of beer factories in the northern and central provinces including Phu Tho, Hai Phong, Quang Ninh, Nam Dinh, Thanh Hoa, Quang Binh, and others.

Here, the construction of beer factories shows no signs of slowing down and some provinces, including Phu Tho, Nghe An, Binh Duong, are home to many different brands of beer factories.

Beer manufacturing projects invested by foreign firms have entered the local market with giant sums of investment. Recently, the Danish beer firm Carlsberg, joined forces with local enterprises to build factories.

After a period of importing products for domestic consumption, the US-branded Budweiser has begun building a factory in Viet Nam.

Hirofumi Kishi, General Director at Sapporo Viet Nam Limited Company, unveiled in Tuoi Tre newspaper, that the company's factory in Long An has completed the first phase of construction, and will produce 40 million litres of beer every year.

Sapporo also plans to expand the factory up to a capacity of 100 million litres a year. Hirofumi Kishi said that his company's factories will also be built in other localities.

According to Viet Nam Beverages Association, beer consumption rates are expected to increase an additional five percent this year regardless of economic slump.

Hirofumi Kishi was quoted as saying Viet Nam's macro economy stability and speedy economic development, encourage foreign firms to invest here. Hirofumi added that demand for domestic consumption was huge as Vietnamese living standards have improved.

The Japanese CEO predicted a growth rate of 10 per cent in the Vietnamese beer market year-on-year for the forseeable future. --HCM CITY (VNS)

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