Vietnam will increase its annual beer output to 3 billion liters by 2010 in line with the sector’s rising growth rate, according to the Ministry of Industry.
The production expansion is planned to catch up with rising beer consumption in Vietnam, the ministry said, adding that each person in the developing country will drink 28 liters per year in 2010 compared to 18 liters per year now.
According to recent figures from the ministry, Vietnam consumed around 1.4 billion liters of beer in 2004. The volume is estimated to surpass 1.5 billion liters this year.
During the past few years, increasing demand has fueled expansion of production capacity by beer producers and has also lured new investors to the sector. Increasing capacity at two domestic beer giants, Sabeco's Sai Gon Beer and Habeco's Hanoi Beer, has resulted in the two companies capturing 50 per cent market share between them.
Sabeco is planning to raise its production output to 200 million liters by 2008. Last year, Sabeco produced 460 million liters and this year's output is expected to rise to 550 million liters.
Habeco's new project in northern Vinh Phuc province has a designed capacity of 100 million liters per year and is ready to begin operations. This will bring Habeco's total output to more than 200 million liters per year.
Meanwhile, Hue Beer Company in central Hue City is also planning to build a new beer factory with a capacity of 50 million liters per annum in Phu Bai Industrial Zone and another joint venture with 30 million liters per year in Quang Tri province.
Sensing profits, foreign investors have not stood by idly. They have also succeeded in penetrating the market by expanding production, setting up wholly foreign-invested or joint venture companies as well as acquiring stakes in local beer producers.
Foster's Danang Beer Company is asking for permission to raise its annual output from 45 million liters to 85 million liters.
San Miguel Beer Company also plans to produce 50 million liters of beer in 2010 instead of the current 20 million liters.
A joint venture between Vietnam Joint-Stock Dairy Products Company (Vinamilk) and SAB Miler, which is underway in the southern province of Binh Duong, is set to churn out 100 million liters of beer per year.
Carlberg, a major beer producer from Denmark, has recently picked up a 25 per cent stake in Halida, the Southeast Asia Beer Company, and a 15 per cent stake in Hue Beer Factory for $14 million.
Carlsberg also financed Habeco with $20 million to build Vinh Phuc Beer Factory, and aims to become Habeco's strategic shareholder once the company is equitized.
The US's Anheuser-Busch is also planning to be a Sabeco shareholder.
While total beer output in the country increased from 1.29 billion liters in 2003 to 1.37 billion liters in 2004, this year, the industry is expected to churn out a whopping 1.5 billion liters, meeting domestic demand, said the Ministry of Industry.
Investment
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