Asia Pacific Breweries ups capacity in Vietnam

Asia Pacific Breweries ups capacity in Vietnam

Asia Pacific Breweries is seeking to profit further from Vietnam's strong economy by expanding its brewing capacity in the country by 25%.

The Tiger beer brewer will spend SGD90m (US$71.9m) to add 1.4m hectolitres to existing capacity at its brewery in Ho Chi Minh City, it said today (16 May). The group owns 60% of the brewery, which is a joint-venture with Saigon Trading Co and has a current capacity of 2.8m hectolitres.

"The Vietnamese beer market has been growing with the rapid economic development of the country," said Roland Pirmez, CEO of Asia Pacific Breweries (APB), which is a joint-venture between Heineken and Fraser & Neave.

"Given its sizeable population of 87m people and rising affluence, particularly amongst its large young population, beer demand has been growing at a double-digit rate and we believe this rate of growth will continue in the medium term," Pirmez said.

The Ho Chi Minh brewery expansion will include a second canning line that can produce up to 90,000 cans per hour, fermentation facilities and malt silos, as well as a brew house upgrade and warehouse extension.

APB is already working on expansion projects at its breweries in Hanoi and Danang. All three expansion programmes are set to be completed by the end of 2011, said the group, which has five breweries in Vietnam.

Vietnam drove APB to a strong performance in the first half of the brewer's fiscal year. Last week, the brewer announced a 23% rise in net sales for the six months to the end of March, to SGD1.5bn.

However, it warned that the strengthening of the Singapore dollar against the Vietnamese dong will hold back profits in the second-half.