E-Malt.com News article: Singapore & Mongolia: Asia Pacific Breweries to build a 300,000 hl brewery in Mongolia

Asia Pacific Breweries (APB) announced on November 7th that the brewing company, sets up its brewery in Mongolia in 18 months time.

The brewer of the world-renowned Tiger Beer has entered into an agreement with the MCS Group for a greenfield project to build a 300,000 hectolitre brewery. This comes hot on the heels of APB's acquisition of a 60% stake in a brewery in Sri Lanka in late September 2005. The joint-venture, MCS-Asia Pacific Brewery LLC (MCS-APB), is 55% owned by APB while MCS owns the remaining 45%. The brewery is expected to cost an estimated US$15 million and will be funded by a combination of equity, which will be contributed by shareholders in proportion to their shareholdings and borrowings.

MCS-APB represents APB's maiden equity investment in Mongolia. The investment is consistent with APB's regional expansion strategy to develop greenfield brewery opportunities and acquire strategic interests in domestic breweries within selected markets to create defendable and profitable businesses.

"Mongolia is amongst the emerging markets that APB has identified for growth and the partnership with MCS has given APB access to the growing Mongolian beer market," said Mr Koh Poh Tiong, Chief Executive Officer, APB.

"Our investment is part of our continuous search for new markets to brew Tiger Beer, our flagship brand. Upon completion of the brewery, Mongolia will be the eighth country to brew Tiger Beer, joining the ranks of Singapore, Malaysia, Thailand, Vietnam, Myanmar, Cambodia and China. To realise our vision of turning Tiger Beer into a pan-Asian beer that is widely brewed and enjoyed throughout this part of the world, we shall persist in our efforts to introduce the brand into as many pan-Asian markets as possible with an ultimate goal to brewing it in each market," he elaborated.

Mongolians are no strangers to Tiger Beer as Tiger Export Pte Ltd (TEPL), the export subsidiary of APB, has been exporting Tiger Beer to Mongolia for 13 years. Currently it can be found in several pubs, restaurants etc in Ulaan Baatar, the capital of Mongolia.

The Mongolia beer market is at present relatively undeveloped. APB is keen on this market as demand for beer is expected to grow in the next few years. Although the size of the beer market is small at around 250,000 hectolitres, per capita consumption for its population of 2.6 million is low at 10 litres - allowing for future growth.

Furthermore, in recent years, the market has witnessed a shift in demand from vodka to beer as consumers favour liquor with lower alcohol content. Also, a strong drinking culture, in addition to a strong economic growth (10% in 2004), is expected to drive demand for beer upwards.

MCS-APB has supposed the responsibility of importing Tiger Beer into Mongolia while Zuunkaraa Trade Company, a MCS subsidiary that is an exclusive distributor of the MCS Group's range of vodkas and other spirits, will be responsible for all sales and distribution of beer for MCS-APB.Both APB and the MCS Group will work towards building a market presence during the interim period before the brewery is constructed. In this way, Tiger Beer would have gained greater popularity and a larger market share by the time the brewery is ready for commercial production.

"MCS-APB will be concentrating our marketing efforts on developing the beer market. To extend the reach of Tiger Beer in the Mongolian market, we shall be tapping into MCS's extensive distribution network and expertise in this area.

"By building a greater awareness of our beers over the next 2 years, we shall ensure that there is greater demand for our brands by the time the brewery is ready for commercial production," explained Mr Koh.

Asia Pacific Breweries Limited (APB) is a Singapore listed company supported by 22 brewery operations in nine countries in the Asia Pacific, namely Singapore, Malaysia, Thailand, Vietnam, Cambodia, China, New Zealand, Papua New Guinea and Sri Lanka.

It is a joint venture between the Fraser and Neave Group of companies and Heineken of Holland. Formerly known as Malayan Breweries Limited, it changed its name to APB to more accurately reflect the growing regionalization of its business interests in 1990.

APB manages a portfolio of over 40 beer brands and brand variants, with Tiger Beer and Heineken as its flagship brands. Tiger Beer is a Singapore icon with international standing, and arguably the most-widely marketed Asian beer brand with a presence in over 60 countries.


08 November, 2005