World’s 6th largest brewer’s first facility outside China
Tsingtao Brewery, the biggest Chinese brewer, yesterday signed a memorandum of understanding with a Thai partner to jointly invest in a 5-billion-baht factory in Samut Sakhon province.
It clears the way for the first Tsingtao brewery outside China.
Tsingtao Beer (Thailand) Co will be set up with 500 million baht in registered capital. Tsingtao will hold a 45% stake in the venture with the remaining 55% to the Namyong Group, a marine transportation and port operator.
Group president Theparak Leungsuwan said the 60-rai factory will be built in Tambon Bang Krachao of Muang district.
The construction will have three phases and 90% of the production capacity of 200,000 tonnes per year will be exported to Europe and Asia.
Of the total investment of 5 billion baht, about 1.5 billion will be spent on its first phase, which will start early next year and have a capacity of 50,000 tonnes per year. Construction of the second and third phases will begin over the next two years.
“The Thai factory will be the most important production base for exporting Tsingtao beer to Europe and Southeast Asia,” Mr Theparak said.
Tsingtao is now the world’s sixth-largest brewer. It has 59 beer factories in China and its beer is exported to over 70 countries.
Thailand is attractive for Chinese investors because it has free trade agreements with many countries including Australia. Apart from the tax benefit, the cost of transportation from Thailand to Europe and Australia is a lot cheaper than exporting from China, he said.
Transportation from Thailand to Europe costs around US$500-800 per container, and only $500 per container from to Australia.
The Chinese partners also see a huge opportunity to penetrate the Asean beer market, cashing in on the Asean Economic Community scheduled to take effect in 2015.
“We expect our location in Samut Sakhon will be safe from flooding,” he said.
Mr Theparak, who is also vice-president of the Thai-Chinese Culture and Economy Association, said the group has invited other Chinese investors to Thailand. Among potential investors is an original-equipment manufacturer for tyres, and a plant for this firm would cost about 40 billion baht. It will visit Thailand later this month for more talks.