San Miguel Brewery, Inc. (SMB) is planning to allocate at least $70 million in order to establish a new brewery that will be located in Vietnam. According to the company, they are currently doing a market study to see if the location and the opportunity really fit their target. The sole purpose of this project is to align its production to the demand for the products of the company, particularly in Southeast Asia. The firm also explained that if they are going to build a new plant, it should be at least two million hectoliters, which will undergo thorough research. Let’s take a look at some of the significant points of the market.
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While the target is to construct a 2-M hectoliter brewery, the company noted that its capacity in Vietnam is only 200,000 hectoliters as of this moment. Some other international markets are noted to have an oversupply of the company’s products. SMB also considered that the per capita in Vietnam is higher than of the Philippines, 44 liters and 19 liters respectively. This is one of the reasons why they see Vietnam as a really good market. And though there is a decline in the company’s W1n Bia brand and flat sales volume for San Miguel that caused the volume and profit to decrease last 2018, SMB is still hopeful to increase San Miguel volume through the increase in distribution in trade outlets such as bars, wedding sites, and hostels
The brewer to be built in Vietnam is just another expansion project of the firm. In fact, it planned to construct a brewery in the United States, particularly in Los Angeles, California and now waiting for the confirmation if they can push through with the project. This is to address the demands of the company’s project in North America. The company disclosed that the US brewery plan does not only concern its capacity. It also considers how well would the brewery go along with the community. The expected time frame for the US project to be planned is around six months but still possible to take longer as it is an international project.
Now that the Rice Tariffication Law has been approved, SMC, the parent of SMB, is preparing for the rice imports. The trading of rice will be managed by SMC and a lot of good benefits await the whole company. The rice that will be imported can be used by SMB to produce alcohol. This will also be a good impact on the farmers’ income status in the country as this will help them stabilize their financial needs. The potential countries where they can import rice include Thailand, Vietnam, and Cambodia. To add, the company is already preparing the sites in case the guideline for importation is given to them.