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Thai Brewers Get Ready For Launch Of Asean Economic Community


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REGIONAL INTEGRATION

Brewers get ready for launch of AEC

KWANCHAI RUNGFAPAISARN

THE NATION

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BANGKOK: -- Two local beer giants are spreading their wings to cash in on the Asean Economic Community, but some concerns have been raised, as Thailand will lose competitive advantage to other Asean members when the AEC is fully effected in 2015.

Thai Beverage expects its exports to surge from Bt6 billion last year to more than Bt15 billion by 2015 as it accelerates its shipments of both alcoholic and non-alcoholic products, extends its portfolio to more premium goods and expands its manufacturing for both types of beverages to Vietnam and Myanmar.

Myanmar is a newly opened market with strong potential for growth. Beer consumption there is 200 million-300 million litres per year, far behind Thailand's 2 billion litres per year.

Charoen Sirivadhanabhakdi, chairman of TCC Holding, which is in many diversified businesses, is looking at setting up plants in Vietnam for its major beverages, notably beer and non-alcoholic drinks.

Among TCC's major units are ThaiBev, the brewer of Chang beer, Oishi Group, the leading producer of ready-to-drink green tea, and Berli Jucker (BJC), which already has extensive business interests in Vietnam.

Charoen said last week that investment in beverage facilities in Vietnam would, however, not occur before 2015, when the AEC is fully implemented and the company has established a firm distribution network and support facilities, such as plants for glass bottles and aluminium cans, in the country.

"We need to develop strong business fundamentals in Vietnam in the areas of human resources, logistics and distribution, and support facilities such as product containers and packaging, before setting up our beverage plants there," he said.

MALAYSIA, VN PLANTS

BJC already operates glass-container plants in Malaysia and Vietnam in partnership with Owens-Illinois, the world's leading producer of such products. BJC has also acquired a 75-per-cent stake in Thai Corp International, a Thai-owned trading and distribution business in Vietnam.

Thai Beverage Can, a subsidiary of BJC, has formed a joint venture with US-based Ball Corp, the world's largest producer of aluminium cans, to build a can factory in Vietnam for US$60 million (Bt1.85 billion).

BJC is also looking for investment possibilities in other promising markets, including Myanmar and Indonesia.

Charoen said he is confident in the country's ability to adjust to the coming AEC. The country, however, should rely on its strengths in agriculture as it moves forward and become even more competitive beyond border trade.

To cash in on the AEC, Thai companies have to branch out in the region, as there will no longer be any boundaries for trade and business, he added.

Piti Bhirombhakdi, regional marketing director for Singha Corp, said the company needed to study many factors in expanding its beer business abroad, including branding. It has to consider whether it is ready to expand at the regional and global level and whether its current manufacturing capacity can supply export markets effectively. The company also needs to study details and regulations regarding the market situation and investment regulations of those countries it is interested in.

"To expand our investment abroad, we will look for local entrepreneurs with business skills and potential in the business for a win-win partnership. Takeovers, however, are not our strategy," he said.

The AEC would not come out easily, while Thailand will benefit less from the AEC than other |Asean members, he said.

"Looking at the country's capability and its potential to meet any investor's requirement, Thailand can stand alone without the need to join with other countries. Thailand has been opened enough to allow foreigners to take benefit from the country," he said.

Singha Corp is looking for joint venture possibilities with local investors in Myanmar and Vietnam. The company expects the contribution from the international market to double from 10 per cent currently by 2015.

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-- The Nation 2012-05-28

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I imagine that Thailand would want nothing to do with alcohol "dirty beer" and is happy to lose out in this market. The prohibitionists have a firm grip and know best.

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Thailand has been opened enough to allow foreigners to take benefit from the country," he said.

Sorry, just the opposite is true

In the article it is interesting to contrast the views of Charoen Sirivadhanabhakdi, chairman of TCC Holding and that of Piti Bhirombhakdi, regional marketing director for Singha Corp. The chairman is likely to have a better view of where the business is going. He is positive. A regional marketing director (third? fourth? tier) has a more limited perspective. He is the one making a play for more protectionism. One of the key battles being fought out in Thailand is between the free traders Vs the protectionists. The reds (and our friend from Singha) are essentially a force for protectionism, but the divide cuts across all parties and accounts for a lot of the contradictory policies from successive governments.

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Instead of complaining about competition from ASEAN countries, why don't Thai companies work out how they can compete in the other countries.

Sent from my shoe phone

They'd be wasting their time trying to export beer to Viet Nam where the local beer is much better and cheaper than the Thai brands.

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Instead of complaining about competition from ASEAN countries, why don't Thai companies work out how they can compete in the other countries.

Sent from my shoe phone

They'd be wasting their time trying to export beer to Viet Nam where the local beer is much better and cheaper than the Thai brands.

I can't think of a better case for the dismantling of economic borders than the thought that one day I could buy Beer Lao or ABC Stout in my local Tesco. Even if it were at premium prices customers should be given the choice. In a country of 60 million inhabitants the realistic choice is limited to about 6 different beers, all of the same beer style.

Edited by SantiSuk
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Instead of complaining about competition from ASEAN countries, why don't Thai companies work out how they can compete in the other countries.

Sent from my shoe phone

They'd be wasting their time trying to export beer to Viet Nam where the local beer is much better and cheaper than the Thai brands.

I can't think of a better case for the dismantling of economic borders than the thought that one day I could buy Beer Lao or ABC Stout in my local Tesco. Even if it were at premium prices customers should be given the choice. In a country of 60 million inhabitants the realistic choice is limited to about 6 different beers, all of the same beer style.

All rubbish as well! Its as if there is an unwritten rule that they must all be of similar poor standard.

Mass marketing of Halong beer please!!

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Beer sold in other ASEAN countries is far superior to the chemical brews they call beer here in Thailand. I was in Laos recently and had a very fine selection of Lao and Vietnamese beers. I can't see anyone in those countries flocking to Chang and Singha and it is only Thai nationalism that is going to protect those brands from being overwhelmed by superior imports.

Edited by edwardandtubs
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Instead of complaining about competition from ASEAN countries, why don't Thai companies work out how they can compete in the other countries.

Sent from my shoe phone

They'd be wasting their time trying to export beer to Viet Nam where the local beer is much better and cheaper than the Thai brands.

I can't think of a better case for the dismantling of economic borders than the thought that one day I could buy Beer Lao or ABC Stout in my local Tesco. Even if it were at premium prices customers should be given the choice. In a country of 60 million inhabitants the realistic choice is limited to about 6 different beers, all of the same beer style.

YAAA!! One more vote for ABC Stout from Cambodia...

I'm less interested in what brewed junk the Thai brewers can manage to foist of their ASEAN neighbors vs. what actually good Asian beers that are now absent here might finally manage to squeeze into the Thai marketplace.

That's the promise... But somehow, considering it's Thailand, my worst fear is the entrenched powers that be will find some nefarious or obscure way to adequately protect their self-serving interests.

Edited by TallGuyJohninBKK
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Instead of complaining about competition from ASEAN countries, why don't Thai companies work out how they can compete in the other countries.

Sent from my shoe phone

They'd be wasting their time trying to export beer to Viet Nam where the local beer is much better and cheaper than the Thai brands.

Same goes for Cambodia and the Philipines.

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In the article it is interesting to contrast the views of Charoen Sirivadhanabhakdi, chairman of TCC Holding and that of Piti Bhirombhakdi, regional marketing director for Singha Corp. The chairman is likely to have a better view of where the business is going. He is positive. A regional marketing director (third? fourth? tier) has a more limited perspective. {snip}

You don't really know who Piti is, do you? Does the family name ring a bell?

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Beer sold in other ASEAN countries is far superior to the chemical brews they call beer here in Thailand. I was in Laos recently and had a very fine selection of Lao and Vietnamese beers. I can't see anyone in those countries flocking to Chang and Singha and it is only Thai nationalism that is going to protect those brands from being overwhelmed by superior imports.

Nationalism is a far to weak word for what is the real background.The word you were looking for starts with an X Edited by pipo1000
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In the article it is interesting to contrast the views of Charoen Sirivadhanabhakdi, chairman of TCC Holding and that of Piti Bhirombhakdi, regional marketing director for Singha Corp. The chairman is likely to have a better view of where the business is going. He is positive. A regional marketing director (third? fourth? tier) has a more limited perspective. {snip}

You don't really know who Piti is, do you? Does the family name ring a bell?

I don't.

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