Thai juice giant Malee acquires Viet beverage firm for ASEAN expansion
Malee will take 65% ownership of LQSF. It is hoped the acquisition will increase Malee's production base for emerging markets within South East Asia and help to drive the company's foreign revenue from 40%, to 60% over the next three years.
“This will enhance our competitive advantage in serving the needs of middle-to-lower income consumers in the ASEAN region. This acquisition is part of Malee's strategic move to tap into overseas markets, helping to pave the way for the company to achieve our mission of becoming a health-driven global F&B firm by 2021,” said Opas Lopansri, senior vice-president of International Business, Malee Group.
Reasons for the acquisition
The Malee Group said that LQSF's will bring a number of benefits.
Firstly, LQSF has the reputation and credibility as a 25-year-old establishment with products that are well accepted among Vietnamese consumers.
Moreover, LQSF’s integrated production can produce 300 million litres of beverages per year in a high-quality and cost-effective manner. The beverage firm produces a wide variety of products including water, carbonated soft drinks and jelly drinks, in a range of packaging formats such as cans, PET bottles, plastic cups, and glass bottles.
As such, this would increase Malee's total production capacity to 630 million litres per year.
Malee also believes that LQSF’s competitive pricing in the market is an essential factor for success in the ASEAN region's emerging markets.
Last but not least, LQSF’s wide coverage in terms of distribution in Vietnam will set Malee apart from competitors. Its distribution network reaches almost all the regions of Vietnam, and is especially strong in the southern regions.
Eyeing regional growth
"We currently have joint ventures in the Philippines as Monde Malee Beverage Corporation, and in Indonesia as PT Kino Malee (Indonesia). By acquiring this stake in LQSF, we continue to utilise the strengths of our partners in each country to build a strong regional network, which will in turn allow us to strengthen the competitiveness of our joint ventures as part of our ASEAN strategy, ultimately accelerating our growth in the region,” said Lopansri.
"We are confident that this acquisition will greatly benefit our international business, as we establish LQSF as a manufacturing hub serving mass market consumers in Vietnam, Thailand, Philippines, Indonesia, and our other key markets in the ASEAN region. We expect this acquisition to help increase the proportion of our revenue from foreign markets, and consider our international business to be the key growth engine for Malee Group moving forward."
Health-driven global F&B firm
Last July, Malee Group announced it would spend 1bn baht over the next year on restructuring the business to help it become a “health-driven global F&B firm”.
At the same time, the Group said it hoped to attain sales of 10b baht in 2018.
“We invested 500m baht last year and have continued to expand this investment budget with 1b baht for this year and the next,” chief operating officer Roongchat Boonyarat had said.
Malee Group spent over 60m baht (about US$1.9m) in a new environmentally-friendly packaging design, a product portfolio reshuffle to increase efficiency — through the supply chain from production to marketing, storage and distribution — and an integrated marketing communication campaign.
Boonyarat said this was to “expand in the premium fruit juice segment to reach Thai consumers and show them how we take great care in every step of the process, from selecting raw materials to production and packaging”.
Malee Group started producing canned fruit and juice and eventually expanded to also produce cereal drinks and dairy products under the Chokchai Farm brand. The firm celebrates its 40th anniversary this year.
Malee is listed on the Thai stock exchange (SET).
