Vinamilk says Jan-August profit $43 million

Vietnam's top dairy product maker, said on Tuesday it made a profit of 702 billion dong ($43.4 million), or 78 percent of its annual target, in the first eight months of this year.

Vinamilk had revenues of 4.37 trillion dong in the January-August period, or 58.8 percent of its annual target, the firm said in a statement of unaudited results.

It did not say if the profit was gross or net.

The Ho Chi Minh City-based firm also gave no comparative figures for the same period last year, but its January-August profit this year was already 9 percent higher than the net earnings in the first nine months of last year.

Vinamilk aims to raise its annual profit this year by 22.7 percent from 2006 to 898 billion dong on revenues of 7.43 trillion dong.

Shares in Vinamilk closed up 0.63 percent at 161,000 dong on the Ho Chi Minh Stock Exchange.

Source: Reuters

Sabeco IPO progresses cautiously

Leading beverage maker Sabeco will continue with its equitisation, but may move slower than expected as it attempts to list shares during the current period of uncertainty on the stock exchange.

The company’s IPO is still slated for some time in the fourth quarter, and is still receiving a great deal of attention from investors.

Nguyen Quang Minh, the company’s general director, says equitisation progress depends heavily on market demand for shares, which has been poor of late.

Post and Telecommunications Investment and Construction JSC (PTIC), for example, only sold 297,400 of the 2 million shares up for grabs in an auction yesterday. Lacklustre demand has been a problem for a slue of other large-cap companies, including Bao Viet.

Sabeco, maker of Sai Gon Beer, plans to sell a 20 per cent stake in the company during its IPO, with no shares allocated to foreign strategic partners.

"Sabeco will still attract investors, even with the market in such a poor state," says a Kim Long Securities analyst. "It’s one of those companies that investors have been eagerly anticipating, given its solid earnings results over the past few years."

People, though, should not expect to make money off Sabeco shares quickly, given current market uncertainties, and should instead look to the company’s long term prospects, according to Kim Long Securities.

The stock price may not surge on its first day on the bourse, but shares should sell out during the book building phase of the IPO, according to VinaCapital and Bien Viet Securities.

Seasonally strong earnings among food manufacturers in the final months of the year will ensure demand for the shares, analysts say.

Sabeco plans to use the capital raised during the IPO for capacity expansion projects, which will likely help the company’s bottom line in the long term.

In addition, the local beer market is expanding aggressively, catching foreign investor interests, with annual consumption at around 18 litres a person.

"We are also considering several co-operation projects with foreign partners, which will help us advertise products abroad," says Minh, who predicts 2007 revenue will be around VND8 trillion.

"With promising expansion plans, positive earnings result and control over a significant portion of the local market, buying into Sabeco is a good move, especially with the market in such a gloomy state," the Kim Long Securities analyst said.

Source: VNS

San Miguel looks to expand brewing in Vietnam

San Miguel Corp of the Philippines said Friday it wants to expand brewing operations in Viet Nam and possibly into neighboring Cambodia.

Local press reports said San Miguel, Southeast Asia's largest publicly-listed food, beverage and packaging group, would spend up to eight million dollars to build up the capacity of its Viet Nam plant.

"The company confirms that it intends to expand its presence in Viet Nam and that it is studying the feasibility of putting up a brewery in Cambodia," San Miguel said in a brief statement to the Philippine Stock Exchange.

It did not give any financial details in its disclosure.

In the press reports, San Miguel beer division assistant vice president Benjamin Aton was quoted as saying that a brewery in Cambodia might cost 16 million dollars.

The company plans to spin off its domestic beer business under San Miguel Brewery Inc. for an initial public offering possibly before the year ends.

San Miguel, which is 20 percent owned by Kirin Holdings of Japan, also plans to venture into other businesses such as power generation and transmission, water and other utilities, mining and infrastructure.

Source: VNE

Lam Dong tea sells shares

The Lam Dong Tea Joint Stock Co will become the nation’s first tea enterprise to make an initial public offering on the HCM City bourse on June 4.

The company will issue more than 1.9 million shares, representing about 43% of the company’s equity of VND45 billion (US$2.8 million).

Following the IPO, the State would continue to hold a 45% stake in the company, while employees would hold 11.9%.

Several of the company’s subsidiaries were equitised in 2005, including Cau Dat - Da Lat Tea, Di Linh Tea and Coffee, Minh Rong Tea, Ha Giang Tea, Rong Vang Tea and May 1 Tea.

Besides processing green tea, Lam Dong Tea has a black tea processing facility with an annual capacity of up to 1,200 tonnes.

Lam Dong, formed in 1976, annually exports about 1,200 tonnes, or 15-20% of its total output of green and black tea, to the Middle East, and 1,200-1,700 tonnes, or 20-28% of total output, to Asian countries.

It predicts revenue of VND57.4 billion (US$3.59 million) in 2007, VND66.3 billion in 2008 and VND75 billion in 2009, and pre-tax profits of VND1.5 billion ($94,370) in 2007, VND3 billion in 2008 and VND4.2 billion in 2009.

Plans for 2007-09 include investment in renewing equipment and technology, diversifying products, improving quality and expanding markets.

Source: VNS

BIDV finances Vinashin brewery

The Bank for Investment and Development of Viet Nam (BIDV) signed a contract yesterday to provide 20 million euros (US$27 million) in financing for a new Vinashin Beer JSC plant in the northern province of Ha Nam.

The project has a total investment capital of 95 million euros ($130 million) - of which the Czech Export Bank (CEB) is contributing 50 per cent.

CEB did not request guarantees from the Vietnamese Government as part of the agreement.
"BIDV will offer a fixed interest rate for the loan," said BIDV general director Tran Bac Ha.
The CEB and BIDV loans are repayable over a 10-year period.

"The establishment of the plant is quite timely and promises to bring much profit to Viet Nam right now, despite the fact that there are many beer plants nationwide. As far as I know, each Vietnamese person drinks 16 litres of beer per year - compared to countries in Europe where the figure is 170 litres annually," Ha said.

Meanwhile, Czech company ZVU Potez, which manufactures food products and chemical equipment, signed a contract to supply the plant with hi-tech beer-making equipment.
The company said the project had great potential and that Czech beer was sure to be popular with Vietnamese consumers.

Source: VNN

With profits up, TRIBECO thirsts for more

The Tribeco beverage company has set a bulky 459 billion VND (28.7 million USD) revenue target in a campaign to yield over 14 billion VND in net profits this year.

The targets are up 52% and 62%, respectively, from the figures achieved in 2006.

Tribeco chairman Tran Kim Thanh said that strategic partners would play a large part in achieving the goals.
The confectioner Kinh Do Corp, which Thanh also chairs, holds around 35% of Tribeco. With Kinh Do's support, Tribeco is constructing two new factories, one in the north and one in the south; in Hung Yen province and Binh Duong province, respectively.

The factory in Binh Duong will open in August and the Hung Yen-based factory will begin production in December. As the company's first northern production base, the Hung Yen plant will cut Tribeco's transport costs dramatically.

Additionally, Tribeco entered a partnership late last month with the Taiwanese company Uni-President, which specialises in food processing, beverages and retail chains.

Uni-President will help Tribeco produce new products and send its specialists to assist Tribeco in finance, technology, and product and market development.

Source: VNA

Taiwanese firm picks 15% of TRIBECO

Taiwan’s Uni President Enterprises Corp. (UPEC) has bought a 15% stake in Ho Chi Minh’s Saigon Beverage Company (TRI, Tribeco) for US$2.2 million.

Following the deal sealed Wednesday, UPEC and Tribeco – the beverage company’s formal name – have committed to long-term cooperation for mutual growth.

Tribeco representatives have said that doing business with UPEC is a strategic move to enter Asian markets as UPEC plays a leading role in the distribution of food, beverages and retail throughout the continent.

Tribeco plans to commission a VND300 billion factory to produce soft drinks in Binh Duong Province’s Vietnam-Singapore Industrial Park in August. The company will also begin construction of a VND90 billion facility in the northern province of Hung Yen next month.

With the acquisition, the Taiwanese company has become the second strategic shareholder of Tribeco after Vietnam’s leading confectioner Kinh Do Corp with 35.4%.

UPEC moved into Vietnam in 1999 with $220 million in total pledged investment capital. The firm is active in a range of fields like animal and fish feed, wheat flour, food and drinks.

However the company’s current soft drink facilities in Binh Duong Province have not reached their potential.

UPEC spokesman said the beverages line in Binh Duong would be shut down soon to focus on Tribeco.

Source: Thanh Nien

IPOs of largest Vietnamese breweries approved

On Wednesday, the government said it had approved the privatisation of the country's two largest brewers, Sabeco and Habeco, which analysts said would attract strong demand.

Source: Reuters

Vinamilk tries to enter beer market with SABMiller

Vinamilk is to team up with global brewer SABMiller as its looks to enter the country's dynamic beer market.

The news continues the trend of multinational brewers looking for local partners to better adapt to the demands of Vietnamese consumers, and a general growth in appetite for beer in the country.

Vinamilk, which already holds a strong distribution presence and knowledge of the local market through its dairy operations, will combine with SAB to help push the brewers leading brands like Peroni, Pilsner UrQuell and Miller into the country.

A new €33 million plant, which opened its door last week, is expected to allow the two groups to produce 100m liters of beer per year.

However, the venture faces strong competition from a number of other multinational brewers keen on cornering the Vietnamese market.

Just last month, rival Calrsberg acquired a 10 percent stake in Vietnam's second largest brewer, Habeco, which is a state-owned company.

Despite having been operating in the country since 1993, Carlsberg has recently stepped up its production capabilities as the market reaches fruition.

The expected average annual growth for beer production in Vietnam is around eight per cent, according to the company's estimates.

As a result, Carlsberg expects to see beer sales in the country to rise to from around 15 million to 28.1 million hectoliters by 2015, making the market the third largest in Asia.
This confidence was recently also matched by Asia Pacific Breweries (APB), which sees Vietnam as a vital player in the lucrative regional demand for beer.

APB heralded its increasing presence in the Indochina market as a key factor in their successful first quarter results, with recent purchases such as the acquisition of the Fosters brand in Vietnam helping it to a 26 per cent increase in volume.

Source: Thanh Nien

Vinamilk starts brewery joint venture

A brewery with an annual production capacity of 100 million litres was inaugurated at the My Phuoc Industrial Zone No.2 in southern Binh Duong province on Mar. 26.

The joint venture between the Viet Nam Dairy Products Joint Stock Company (Vinamilk) and London-based SABMiller, the world's second largest brewer, will have an initial production capacity of 50 million litres per year.

The SABMiller Viet Nam, whose construction commenced in March 2006, was installed with a state-of-the-art production line from Germany under the supervision of more than one hundred European experts.

Under the deal between the two companies, Vinamilk and SABMiller each hold 50% interest in the 45mio US$ project.

Products of the joint venture, bearing the Zorok trademark, will take advantage of the extensive distribution network of Vinamilk, the market leader in milk and related products of Viet Nam with 75% market share, and the SABMiller's distribution network in more than 60 countries.

Habeco - Carlsberg partnership approved

The Vietnamese Ministry of Industry has approved state-owned brewery Habeco's choice of Carlsberg as strategic partner.
The country's second largest brewer, Habeco is market leader in the northern Vietnam where Carlsberg is present through its brewery-joint venture in Hanoi.

The partnership will provide opportunities for both Habeco and Carlsberg to further strengthen their market positions in northern Vietnam but also in central Vietnam where Carlsberg is market leader through its brewery-joint venture in Hue.

24% of Habeco will shortly be equitized. Carlsberg has been reserved 10% and the remaining 14% will be sold to employees and the public.

The Habeco/Carlsberg-partnership is expected to materialize in a number of areas among which joint investment in brewery projects is the most significant.

"The engagement with Habeco is an important part of our strategy to develop our business in Asia through partnerships and investment in market leading companies", Senior Vice President Jesper B. Madsen, responsible for Carlsberg's business in Asia, said.

Carlsberg entered Vietnam in 1993 through the formation of at joint venture with Viet Ha Brewery owned by the Hanoi Peoples Committee. Carlsberg owns 60% of South East Asia Brewery, which is the name of the operation.

In 1995 the second Carlsberg joint venture was founded through cooperation with the Hue Peoples Committee in Hué Brewery, of which Carlsberg owns 50%.

Similar to other countries in the region the beer market in Vietnam is rapidly growing. The current consumption level amounts to 13 litres per capita. The future annual growth is estimated to about 8% - like the Vietnamese GDP.

Source: Thanh Nien

Fierce competition in the Vietnamese beer market

Viet Nam’s beer market is set for an eventful year as new brands hit the domestic market while beer producers in Viet Nam invest in expanding their market share.

Construction of a plant producing Kronenbourg beer is planned to start in March in Long An Province. The plant, a joint venture between Viet Nam Tobacco Corporation (Vinataba) and Scottish and Newcastle Group, will be able to produce 150 million litres each year. Each partner holds half of the plant’s total investment of 75mio US$.

Patrick Dougan, general managing director of Viet Nam Kronenbourg and development director of the company’s Asia-Pacific arm, said Scottish and Newcastle Group has carefully carried out market research in Viet Nam.
The domestic beer market has an annual growth rate between 9 to 11% and already enjoys fierce competition with many well-known beer brands, including Sai Gon, Ha Noi, Tiger and Heineken, said Dougan.

Viet Nam has 300 plants producing beer and alcohol products. Some of them have boosted expansion of production, including Sai Gon Beer, Alcohol and Beverage Corporation (Sabeco) and Viet Nam Beer Company.

Sabeco has 10 projects on expanding production, boosting co-operation in production and building new factories in provinces and cities, including Cu Chi District - HCM City, Vinh Long Province and Dung Quat - Quang Ngai Province.
The company expects to increase its total annual capacity to 800 million litres of beer in 2009. Sabeco has recently launched the Irish black beer brand Guiness with production of the new brand set for Sabeco’s factory in Binh Duong Province from June, said a Sabeco official.
In addition to buying foreign beer brand franchises, Sabeco has co-operated with Asahi, a Japanese leading beverage producer.

Asia Pacific Breweries Limited (APB) has registered to increase its HCM City-based Viet Nam Beer Factory’s total annual capacity of beer from 150 million litres to 230 million litres.
The APB is carrying out its plan on expanding production by co-operating with Quy Nhon Beer Company to boost the company’s annual capacity from 20 million litres to 100 million litres and to make beer for the region with Quang Nam Beer Company, which has an annual capacity of 25 million litres.
Last October, APB took control of beer factories in Da Nang and Tien Giang and trade marks of BGI, Larue, Larue Export and Larue Superior, owned by Foster’s Group in Viet Nam under an agreement signed between Foster’s and APB two months ago. Under the agreement, APB is solely responsible for producing, packaging, distributing and trading of Foster’s Lager Beer in Viet Nam.

Source: VNS

Ministry of Industry publishes planned investments

Food processing and consumer goods companies plan to invest about VND6.91 trillion (431.9mio US$) to implement new projects this year, according to the Ministry of Industry.

Under the planned investments, there are large-scale projects such as the second phase of the Bai Bang Paper Company; construction of two breweries, each able to make 100 million litres of beer a year; and capacity expansion by the Viet Nam Garment and Textile Corporation.

The Ministry of Industry has suggested that companies accelerate development efforts and take the initiative to look for new capital resources, as well as reduce construction investment risks. Investors also need to focus on the new projects aimed at modernising the industry, say officials.
In the past, investments have not ended in positive results due to difficulties with land clearance and insufficient capital resources, according to the ministry.

The country’s industrial output in January was estimated at VND46.15 trillion (2.88 billion US$), up 26 per cent over the same period last year.

Source: VNS

Carlsberg aims minority stake of Habeco

The state-owned Hanoi Beer Company (Habeco) recently announced plans to begin operating this year as a equitized company, offering a potentially lucrative investment for foreign brewers. The announcement is particularly interesting for Carlsberg, which has already established links with Habeco for a possible partnership in the country.

Carlsberg views Vietnam as a driving force in the development of the region's beer market.
Expected average annual growth for beer production in Vietnam is around 8%, according to Carlsberg's own figures.
This the company expects will see beer sales in the country - which totaled 15.2 million hectoliters in 2006, rise to 28.1 million hectoliters by 2015, making the market the third largest in Asia.

Under the terms of the equitization, the Vietnamese government will retain a 76% stake of Habeco, with the remaining 24% distributed between staff and investors.
Of this 24%, only 10 percent will be available for purchase by a strategic business partner, leaving Carlsberg at best with the potential of a minority stake in the group.

Jens Peter Skaarup, Carlsberg's international spokesperson said that the company was prepared for a gradual approach to expanding its operations within the country, and would persevere with its plans.

Source: Thanh Nien

Saigon brewery to sell equity

The State-owned Sai Gon Beverage Company (SABECO) plans to issue 20% of the company's value in the first phase to become a joint stock firm.
The sale, to strategic partners, employees and the public as well, is scheduled in June. It is in the process to select a consultant for its corporate evaluation.
Last year, SABECO sold 534 million litres of beer, its major product, in Viet Nam and overseas markets including China, Japan, the US and Canada with the export value worth 10 million USD. This year the figures are expected to rise 18% and 147% respectively.

Source: VNA

Hanoi Beer brewery plans to equitize

The Vietnamese government has approved a plan to equitize and list the Hanoi Beer Company, the country's second largest brewer, to raise money to increase production, a government report said Wednesday.

Less than 10% of the compnay known as Habeco would be sold to a foreign investor and shares would be listed on one of the country's two stock exchanges, said the report published on the government Web site.

"The state will retain 76% of the company at the time of the initial public offering, but this stake will be reduced to no less than 51% later," it said.
Industry sources said Denmark's Carlsberg was interested in buying a stake in Habeco, whose best-selling brand is Bia Hanoi.
Habeco, which has a registered capital of 2 trillion VND (124mio US$), signed a cooperation agreement with Carlsberg in 2005.

Vietnam's beer market, averaging 8% growth per year, has attracted the interest of a string of foreign brewers, including Anheuser-Busch, the owner of the Budweiser brand, and Belgium's Inbev.

State-run Saigon Beer, or Sabeco, the country's largest brewer, has also announced plans to partly equitize.

Source: Thanh Nien

Brewery buys bank stake

Leading Vietnamese beer maker Sabeco has bought a 5% stake in Phuong Dong Commercial Bank, in which French bank BNP Paribas has agreed to invest, a bank official said on Tuesday.

The shares in the unlisted Ho Chi Minh City-based lender known as Oricombank were valued in the deal at face value of 31.5 billion VNDong (1.95mio US$), the official said.

"The deal was reached based on our mutual interest and future cooperation," he said without elaboration. Sabeco is the short name for state-run Saigon Beer Alcohol Beverage Corporation.

Oricombank now has a registered capital of 567 billion VNDong, but the value of the deal with Sabeco took into account the bank's new capital of 630 billion VNDong that included the BNP Paribas investment, the bank official said.

Oricombank would be valued at 302mio US$ as its shares are traded at 77,500 VNDong (4.8 US$) on the unofficial markets. Oricombank has yet to say when it plans to list on the country's stock market.

BNP Paribas, the euro zone's second-biggest bank by market capitalisation, said in November it would buy a 10% stake in Oricombank.

The French bank did not disclose the value of the stake. It was expected to finalise the investment in Oricombank later this month or in February once central bank approval was in place, the Oricombank official said.

Major investors holding stakes of at least 10% in Oricombank now include two companies in Ho Chi Minh City, the Finance Management Committee of the Communist Party branch in Ho Chi Minh City and state-run Vietcombank.

Sabeco, the brewer of Saigon Beer and Beer 333, said in October it would double its beer output to 1 billion litres by 2010 when Vietnam's per capita beer consumption is forecast at 28 litres, up from 18 litres in 2006, state media have reported.

Sabeco's production capacity grew 16% in each of 2005 and 2006. It is expected to announce a partial privatisation plan soon under which the state would reduce its stake to 51% over the next few years.

Source: Reuters