Increase In Habeco Stake To Boost Carlsberg's Asia Exposure

It has been clear for some time that Carlsberg , the world's fourth largest beer company by sales, could benefit from greater exposure to Asia given its underlining reliance on Europe. T he Danish brewer ' s announcement that it will increase its stake in Vietnamese beer company Habeco from 16% to 30% demonstrates its expansionary ambitions in Asia.

The Vietnamese Ministry of Industry and Trade gave Carlsberg the green light to increase its stake in Habeco for about US$72mn - valuing the company at more than US$500 mn. While Carlsberg ' s critical Russian business (the country is thought to account for more than 40% of the group's operating income) has show n some encouraging signs after a difficult few years, we believe the brewer is probably in a stronger position to take on expansionary projects in Asia .

Non-Europe Business Still Relatively Modest
Carlsberg Annual Value Sales, % Contribution By Region

In 2011, Asia accounted for close to 11% of Carls berg's annual sales revenue - up from nearly 6% in 2006. That said, m ost of its growth focus has traditionally been on emerging Europe, which distinguishes Carlsberg from drinks firms AB InBev , Heineken and SABMiller - all of whom are less exposed to Europe. We believe a stronger position in Vietnam, a country with a population of about 90mn and where per capita consumption of commercial beer is in excess of 30 litres , is a positive move for Carlsberg .

Habeco is, along with Sabeco , one of two government-owned beer companies that dominate the Vietnamese beer industry. To 2017, BMI sees beer volume sales in Vietnam growing at a compound annual rate of 8% . This would bring per capita beer consumption close to 40 litres , taking into account our As ia team's demographic outlook.

Outlook Backs Up Proposed Habeco Investment
Vietnam Beer Sales (mn litres)
This article is tagged to:
Sector: Food & Drink
Geography: Vietnam

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