Asahi reveals plan to join top food ranks
By 2015, Asahi wants to have joined the ranks of the top global food companies in terms of size. It plans to increase total sales from around ¥1.5 trillion (€11.3bn) this year to ¥2-2.5 trillion in 2015.
Growth targets
Achieving this will mean shifting the focus of the business towards faster growing foreign markets. The Japanese beer market has been shrinking in recent years as tastes diversify, the population ages, and the economy falters. Asahi therefore aims to increase the overseas share of total sales to between 20 and 30 per cent by 2015.
The focus in foreign markets will be on Asia and Oceana, where Asahi has made significant investments. Asahi will be looking to grow Schweppes Australia, which it bought from Cadbury, and improve profitability in China through its partnership with Tsingtao.
Profitability gains in its domestic and foreign markets are a key medium term goal. By 2012 Asahi plans to widen its profit margin from 5.8 per cent to 8 per cent.
This will help the company reach its medium term cumulative cash flow target of ¥360bn or more. In a statement, Asahi said that when allocating this cash, top priority will be given to forming capital and operational alliances, and making investments that contribute to strengthening the foundation for future growth.
Acquisition plans
Reuters reported that Asahi president Hitoshi Ogita told a press conference that the company could spend as much as ¥300 to ¥400bn (€2.2 to €3bn) on acquisitions, and saw good opportunities in Asia including Taiwan, Vietnam, and Cambodia. The news agency reported Ogita saying: “To a certain degree we must attain scale or we will sink in a huge global swirl.”
In its statement, Asahi pointed out that both the Japanese and overseas food industries are undergoing major consolidation. Fellow Japanese brewer Kirin Holdings is in talks to merge with Suntory to create a global food and beverage giant as big as Kraft. Meanwhile, Suntory recently bought Orangina Schweppes and Kraft is bidding for Cadbury.
