March 12 - Barely a year after opening a new brewery in Mongolia, Asia Pacific Breweries Ltd (APB) is pleased to announce the completion of yet another greenfield brewery, now in Vientiane, the capital of Lao People's Democratic Republic (Laos). This brings the brewery group another stride closer to realizing its ambition of becoming the leading brewery group in the Asia Pacific region, with 33 operating breweries in 12 countries. Not only does this latest investment in Laos complete APB's already prominent brewery presence in the high-growth Indochina region, it also marks a key milestone in APB's strategy to introduce locally-produced Tiger Beer to the Lao consumers.
Officially opened by Mr Wong Kan Seng, Singapore’s Deputy Prime Minister and Minister for Home Affairs and Mr Asang Laoly, Lao’s Deputy Prime Minister and Chairman, State Control Commission, on Wednesday, 12 March 2008, this €23 million (approximately S$49 million) brewery established by Lao Asia Pacific Breweries Limited (LAPB), a joint venture company between APB (68%), the Government of Laos (25%) and SBK Consultant Ltd (7%), is the second brewer to be granted a beer investment licence by the Government of Laos.
The new 300,000-hectolitre state-of-the-art brewery occupies a 13-hectare site at Ban NongNo, Veunkham Road in Xaythany District. Like other APB breweries in the region, it will brew Tiger Beer using only the finest ingredients – malt from Australia, the choicest hops from Europe, and a unique strain of yeast cultured in Holland especially for the Tiger brand. The brewery will also introduce other brands to build a portfolio to offer choice to consumers in due course.
Prior to the opening of the brewery, imported Tiger Beer was available at key market centres, pubs and restaurants in Laos. This has enabled the local consumers to experience the distinctive taste of Tiger Beer. Moving forward, LAPB is set to achieve a significant share of market and further extend Tiger Beer’s distribution points throughout Laos to further boost sales for the brand.
A landlocked country bordered by Vietnam, Cambodia, Thailand, Myanmar and China, Laos forms the final piece in APB’s Indochina map. The opening of LAPB aptly reinforces APB’s complete presence in the Indochina region – one realm that has been witnessing high-growth beer sales.
With the nation’s 6 million people consuming about an estimated 1.3 million hectolitres of beer annually, the per capita consumption is about 20 litres. The growth potential of the beer market is underpinned by its young population, coupled with an economic growth of 7.1% per year. Through the application of operational and brand expertise, LAPB will focus on boosting Tiger’s appeal as a premium brand proposition to the consumers and strive to become a significant player.
Elaborating on the milestone, Mr Koh Poh Tiong, Chief Executive Officer, APB, said “The realization of APB’s brewery in Laos provides an excellent platform to build its market position in a growing beer market; and, enables us to reinforce our leading position in the Indochina beer market. It is a fulfillment of our long-standing ambition of having a brewery in each of the countries in Indochina. We are excited about the future of the Indochina beer market and we feel our confidence is justified. After all, the Indochina region has consistently been APB’s largest profit contributor and accounted for about 48% of APB’s total PBIT for FY 2007/08. Versus the year before, the region reported an impressive volume gain of 44% and an organic PBIT growth of 23%, signifying the strong demand for APB’s beers in this region.”
With the inclusion of LAPB, APB now has 7 operating breweries throughout Indochina (5 in Vietnam, 1 in Cambodia and 1 in Laos) and Laos is the ninth country in the Asia Pacific region to brew Tiger beer.
“Regional expansion has always been a critical cornerstone of APB’s growth strategy as we work towards our aspiration of becoming the leading brewery group in the Asia Pacific region. As we press on with our regionalization strategy, we shall continue to set our sights on new markets where our entry and participation will allow us to further extend our footprint and capture a larger share of the profit pool in those markets,” explained Mr Koh.