APB builds new packaging facility in Vietnam

Improved capabilities and continued investments to augment company’s S$130mln profit in IndoChina region.

To meet robust and surging beer demand, Vietnam Brewery Limited (VBL) in which Asia Pacific Breweries Ltd (APB) holds a 60% interest, on Friday commissioned a new bottling line at its brewery in Danang, Vietnam, according to an APB report.

Unveiling the new state-of-the-art packaging facility on Friday were Mr Lim Hng Kiang, Minister of Trade and Industry, Republic of Singapore; Mr Nguyen Ba Thanh, Party Secretary of Danang City, Vietnam; and Mr Chris Kidd, Regional Director, IndoChina, APB.

On the opening of the new facility, Minister Lim said, “This marks another successful milestone for Asia Pacific Breweries (APB) and Vietnam Brewery Limited (VBL).” Minister Lim added that, “This milestone is testament to the strong and thriving business linkages between Singaporean and Vietnamese companies and also reflects the confidence of Singapore’s private sector in Vietnam’s long-term economic prospects.”

On the milestone, Mr Kidd said, “The commissioning of the new bottling line marks a significant milestone for VBL in Danang where the brewery produces the popular Larue beer, which has a heritage of over 100 years. While Larue beer enjoys a strong following in the Danang and Quang Nam Provinces, it is also available in over 40 other provinces in Vietnam where the brand experienced high double-digit growth in the past two years. With the new bottling line in place, our Danang brewery is now better equipped to cater to the strong and rising beer demand. More importantly, this move enables us to sharpen our competitive edge and efficiency to prime ourselves for more sustainable growth ahead for the APB Group in Vietnam.”

The new packaging line offers greater system speed and efficiency as well as a new generation of robotic technology that can produce 50,000 bottles of beer every hour, doubling the previous bottling capacity. The investment is part of a multiphase programme which will double the brewery’s capacity in the next few years. This phase also includes investments in a warehouse, fermentation tanks and a new brewhouse. Expansion work will be completed in 2011.

The investment underlines the success of APB in and its commitment to the Vietnamese beer market. The brewery in Danang is one of five breweries that APB owns in Vietnam. Through its joint venture with SATRA in VBL, it also oversees brewery operations in Ho Chi Minh City, Tien Giang and Quang Nam where brands such as Tiger, Heineken, Larue and BGI are brewed. Meanwhile, APB taps on the opportunities up in northern Vietnam through its wholly-owned Asia Pacific Brewery (Hanoi) Limited. Collectively, they maximise market coverage and deliver synergies for APB in Vietnam.

Mr Kidd elaborated, “Vietnam has been a significant and growing contributor to the bottom line of the APB Group. We believe the long term prospects of the Vietnamese beer market remain favourable, given its large population and rising affluence. We anticipate further investments in capacity expansion will be necessary to maintain our competitive position.”

Vietnam, Laos and Cambodia make up the Indochina region of the APB Group. The region has been a consistent star performer for the Group, turning in robust revenue and Group Profit Before Interest, Taxation and Exceptional Items (PBIT) year-on-year. In the first six months ended 31 March 2010, the region generated a revenue of S$503 million and reported a PBIT of S$130 million.