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Heineken expanding Ba Ria Vung Tau brewery

Released at: 20:00, 09/02/2017

Heineken expanding Ba Ria Vung Tau brewery

Photo: Heineken Vietnam

Dutch beer giant given green light to pour additional $185 million into brewery.

by Hong Nhung

The Heineken Vietnam Brewery Vung Tau JSC has recently received an investment license for a 12-fold expansion of its brewery at the My Xuan A Industrial Zone in the southern province of Ba Ria Vung Tau.

Heineken Vietnam will spend an $185 million on increasing its capacity to over 610 million liters of beer per year.

The country’s largest foreign brewer acquired the brewery from Carlsberg in July last year. At that time it had a capacity of 50 million liters per year.

The acquisition of the brewery is part of Heineken’s expansion plans to meet market demand, a representative from Heineken Vietnam told VET. The value of the deal was not revealed at the time.

Heineken Vietnam Brewery’s portfolio of brands includes Heineken, Tiger, Larue, BGI, Bivina, Desperados, Affligem and Strongbow Cider.

The Vietnam Brewery Limited Company (VBL) officially changed its name to Heineken Vietnam Brewery Limited Company (Heineken Vietnam Brewery) on August 1. The brewery was renamed Heineken Vietnam Brewery Vung Tau and the expansion plan was then submitted to the Ministry of Industry and Trade (MoIT).

According to Euromonitor, over 80 per cent of Vietnam’s beer market belongs to Sabeco, Heineken, and Habeco.

Consumption of beer in January rose 20 per cent compared to January 2016, according to reports from MoIT. Domestic production was nearly 4 billion liters last year, meaning each person in Vietnam drank 42 liters on average, up 4 liters compared to 2015.

In terms of output, Heineken ranked second last year, with 1.1 billion liters, following Sabeco’s 1.6 billion liters.

Beer accounts for 94 per cent of alcoholic beverage consumption in Vietnam. According to Canadean, a research company focusing on the international soft drink and alcoholic beverage industries, Vietnam’s alcoholic beverage market has experienced rapid growth of 6.4 per cent per year for the past ten years.

Beer consumption in Vietnam is expected to reach 4.1 billion liters annually in 2020 from around 3.4 billion liters this year. Heineken said the country is its second most profitable market, after Mexico, and still holds great potential. Those aged 18, the legal drinking age, will exceed 72 million by 2021, from under 69 million at present.

Vietnam’s beverage producers plan to produce about 4 billion liters of beer this year, up 10 per cent against 2016, according to the Vietnam Beer-Alcohol-Beverage Association (VBA). 

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