Ito En to fizz up the soft drink sector

A Japanese soft drink maker is looking to add fizz to Vietnam’s soft drink market. Ito En will enter Vietnam in the footsteps of two giant players, Coca-Cola Company and PepsiCo. Ito En is one of the largest soft drink producers in Japan and it said it would establish a representative office in Vietnam to research the investment environment.

It has already established Ito En Asia Pacific Holding with capital of $25.5 million in Singapore in June to promote business development in South East Asia. “Our representative office would be opened in Hanoi this month,” the company said.

Ito En said it would found a holding company in Singapore to build plants in Myanmar and Vietnam for producing tea and other soft drinks. Currently it is in talks with companies from Singapore and Vietnam about capital tie ups and joint ventures, aiming to reach agreements this year at the earliest.

The London-based Business Monitor International Company (BMI) forecast that Vietnam’s alcohol and soft drink sales in value terms would increase by 70.9 and 33.3 per cent, respectively from now to 2015. This growth was ascribed to the country’s economic growth, increasing urbanisation, external investments and rising tourist numbers.

In fact, Vietnam is home to many different types of soft drinks produced by big foreign companies such as US’ Coca-Cola Company, Singapore’s PepsiCo, UK’s spirits giant Diageo and Japan’s Kirin..

Coca-Cola, for example, has said that it plans to invest $200 million in Vietnam by 2013, adding to its $280 million investment over the past 10 years.

The move was reported to meet local soaring demand for Coca Cola’s products despite Coca-Cola having three factories in Vietnam producing a total of 608 million litres per year. The move would also secure Coca Cola’s larger market share in Vietnam, given stiffer competition from its direct rival PepsiCo, according to the Vietnam Beer, Alcohol and Beverage Association.

PepsiCo Vietnam opened its $45 million new beverage plant in Amata Industrial Zone in March as part of its push to expand operations in the Mekong Delta to produce PepsiCo’s popular brands, including Pepsi, 7Up, Mirinda, Twister, Sting and Aquafina purified water
Saad Abdul-Latif, chief executive officer of PepsiCo Asia, revealed an ambitious strategy to pour $250 million into Vietnam within three years.

Abdul-Latif  said: “As I look at countries in Asia, the Middle East and Africa, I see Vietnam as one of our most important growth markets. There are three key reasons why I am confident, and why PepsiCo is betting, that Vietnam will play a key role in the Asian market.”

While, the largest soft drink plant in Vietnam’s central and western highlands, $91 million Number One Chu Lai soft drink plant three month ago invested by domestic firm Tan Hiep Phat kicked-off to grasp the potential in Vietnam.