Sapporo plants foot firmly in Vietnamese beer market

Sapporo International has concluded a contract to buy 29 per cent of Vietnam National Tobacco Corp. (Vinataba) in its Vietnamese beer venture. After the transaction, Sapporo Vietnam became a wholly-owned subsidiary of the Japanese beer maker.

The transaction’s value was not disclosed by Sapporo. However the firm is thought to have spent more than a billion yen ($8.28 million) to buy out its Vietnamese partner.

“We had to make a quick decision to become a wholly-owned subsidiary as state-run Vinataba had to withdraw capital from its non-core business fields,” said a Sapporo press release.

Sapporo Vietnam Limited was formerly known as Kronenbourg Vietnam Limited. The name has since changed after Sapporo Holdings acquired a 50 per cent stake in the venture from Danish brewer Carlsberg along with a further 15 per cent from Vinataba. As of March 29, 2010, Sapporo Vietnam Limited operates as a subsidiary of Sapporo Holdings Ltd.

Four years ago, Sapporo Vietnam Limited opened a beer factory at the Viet Hoa - Duc Hoa 3 Industrial Park in the Mekong Delta province of Long An with total investment of $75 million. The factor is capable of producing 40 million litres per year in its first phase, increasing to 100 million litres and 150 million litres per year in the next two phases, respectively. This is Sapporo Holdings’ third beer factory, with two others in Japan and the US. In 2011, Sapporo raised its stake to 71 per cent in the joint venture, with the remaining stake of 29 per cent held by Vinataba.

Sapporo is also seeking to expand its network of vendors, which remains confined mostly to the Ho Chi Minh area, near its brewery. Around 4,000 restaurants and shops now sell Sapporo Premium. By pushing into Hanoi, Danang and other areas, Sapporo aims to increase this number to 7,000 or so by the Tet lunar New Year holiday next February. Last year, Hirofumi Kishi, general director of Sapporo Vietnam Ltd said the firm planned to increase its production capacity in Vietnam by more than double. Sapporo Vietnam’s sales volume rose a healthy 34 per cent last year.

Vietnam’s beer market measured just 3.41 million kilolitres in 2014 but is projected to grow about 40 per cent by 2019, according to UK-based research company Euromonitor.