China-based brewers Tsingtao said that the company intended to take full advantage of preferential trade agreements in the ASEAN (Association of South East Asian Nations) area, to provide fresh beer at a competitive cost to consumers in the region.
Zhiguo Jin, chairman of the board at Tsingtao said: “Our plant in Thailand will help Tsingtao to become a truly international company by developing local supply chain advantage, cultural integration, management and business operations control and competitiveness, while gaining valuable experience for future international development.”
The brewery in Thailand is expected to start operations in 2013 and will produce up to 200 million litres of beer a year.
Tsingtao’s investment in Thailand is part of a broader interest in the country’s food industry. A spokesperson from Thailand’s Board of Investment Agency told FoodNavigator-Asia that investments in Thailand’s food industry had been growing year-on-year due to the abundant incentives. Companies can enjoy tax exceptions for up to 8 years, with a minimum investment of 1m Thai baht (US$31,000).
Furthermore, Tsingtao has also indicated it will set up more breweries in the ASEAN region.
Tsingtao’s deputy general manager at its international headquarters, Ning Ma, revealed more plants would be set up in the ASEAN region.
He added that the company would be looking to invest where labour was cheap and its, “Tsingtao name is recognised”. A team has already been formed to investigate the feasibility of setting up another brewery in the region.
Tsingtao has chosen Thailand to set up its first plant with the aim to develop and access its rapidly growing customer base in Southeast Asia, Australia and New Zealand and Europe as well as to take advantage of economic benefits enjoyed by ASEAN members.
“Tsingtao can take full advantage of preferential trade agreement in the ASEAN area, to provide fresh beer at a competitive cost to consumers in the region,” reads the company statement.
Business Insights have put the Asia Pacific beer market at 25% of the total beverage market.
A 2010 report on beverages by Responsible Research Company has indicated the market growth for alcoholic drinks is particularly strong in emerging Asian economies, driven by a range of socio-economic factors.
These include favourable demographics, which ensure an increasing Legal Drinking Age (LDA) population. In addition, increased per capita income and urbanisation in countries such as India and China.
Tsingtao currently exports to more than 70 countries around the world. Its beer exports account for half of the Chinese market and it is the sixth largest beer producer in the world.