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Vietnam is investing alcoholic drinks industry

This Country continues to attract considerable attention and with one of the highest growth forecasts in the Asia Pacific region this is unsurprising

Vietnam's food, beverage and mass grocery retail (MGR) sectors continue to attract both domestic and multinational investment, as discussed in BMI's recently published Vietnam Food & Drink Report for Q310. Given the relative state of immaturity of these sectors coupled with the country's large population, it is not surprising that companies are keen to invest, despite some of the challenges associated with operating in the country.

One area that has received a lot of investment this quarter is the country's alcoholic drinks industry. In late January 2010, Vietnam's second largest brewer, Hanoi Beer Alcohol and Beverage Corporation (Habeco) started constructing a VND168bn (US$9.3mn) beer plant in Phu Tho province with the aim of increasing annual production capacity by 25mn litres. Following this, in April market leader Saigon Beer Alcohol and Beverage Corporation (Sabeco) announced plans to build a VND680bn (US$36mn) beer factory in the south-central province of Ninh Thuan. It is expected the factory will produce 50mn litres of beer annually. In making these investments both brewers are seeking to raise their competitiveness in preparation for the forecast increase in beer sales, which are expected to rise 32.8% to reach 2.6bn litres in 2014.

Meanwhile, the country's MGR sector continues to attract considerable attention and with one of the highest growth forecasts in the Asia Pacific region this is unsurprising. Keen to expand outside of its stagnant domestic market, Japanese convenience retailer FamilyMart announced in February 2010 that over the course of the year it will open five more stores in Ho Chi Minh City. The retailer currently only has one store in Vietnam yet has ambitious plans to have a network of 300 outlets in five years. Vietnam's convenience retail sector will appeal to FamilyMart, as value sales are expected to increase 65.2% to 2014 compared to a growth rate of just 2.2% over the same period in its home market. Vietnam's leading retailer Saigon Co-op also confirmed expansion plans this quarter, announcing that it would increase its supermarket network to 52 by the end of the year and increase the number of food stores from the current eight to 20. The retailer is also keen to pursue expansion outside of Vietnam announcing that it plans to build its first overseas supermarket in Cambodia.

However, the news is not all positive and Q210 saw Vietnamese seafood company Nam Viet Corporation announce a loss of VND176.3bn for FY09, signifying that some companies are still suffering the effects of the economic slowdown.

by S. C.
07 june 2010, World News > Asia