Extending its presence to South Asia, Asia
Pacific Breweries Ltd (APB) has acquired a 60% equity stake in
United Brewery Lanka Limited (UBL). APB will inject up to US$ 5
million (S$8.25 million) in fresh shareholders funds to be
funded from internal resources.
Partnering Sri Lankan-based Anandappa family
group and associates and MBL Offshore Limited, a wholly-owned
subsidiary of Phoenix Beverages Limited which is a leading
beverage group from Mauritius, the investment marks APBís maiden
entry into Sri Lanka. ís stake in UBL is consistent with our
regional expansion strategy to acquire strategic interests in
domestic breweries within selected markets to create defendable
and profitable businesses. South Asia is amongst the emerging
markets which APB has identified for growth and our interest in
UBL will give APB access to the growing Sri Lanka beer market.,"
said Koh Poh Tiong, Chief Executive Officer, APB.
Sri Lanka is one of the most liberal and foreign
investor friendly economies in South Asia. With a population of
approximately 19.3 million, the countryís GDP is expected to
grow between 5% and 6% per annum. In line with its economic
growth, the Sri Lanka beer market is expected to grow at a rate
of 6% per annum. "In view of such economic conditions that are
supportive of and conducive to a rapid growth in the Sri Lanka
beer industry, we believe that the Sri Lanka market offers good
potential for APBís on-going expansion," continued Mr Koh.
UBL operates a brewery with a designed annual
production capacity of 120,000 hectolitres. The brewery which is
located in Mawathagama, in central Sri Lanka, produces and
markets local beer brands including Bison XXtra, Kings Lager,
Kings Pilsner and Kings Stout.
UBL offers potential for further upside from
leveraging on its local beer brands and distribution system. By
leveraging on the strength of UBLís distribution with trade
channels, there will be an opportunity for APBís beer brands to
cross sell into the various segments of the Sri Lanka market.
APB expects that the sharing of knowledge, processes and
systems, particularly in marketing, distribution and
procurement, will further enhance UBLís competitive position.
Koh added, "UBLís existing operations and beer
brands which are available in the local marketplace will enable
APB to jump-start the business in the country. We believe that
there are opportunities for us to enhance the value of UBL
through the application of operational and brand expertise. The
investment also creates opportunities for us to bring APBís beer
brands into the growing Sri Lanka beer market which I believe
will offer good growth prospects. At the same time, we will be
able to draw on the experience of our established local partners
and management of UBL to ensure the greater success and goodwill
of the company."
Moving forward, APB will team up with the
management of UBL to intensify UBLís marketing efforts and
centre its activities round enhancing brand equity and
strengthening its brand portfolio. Operations at the production
front and distribution points will be fortified to compete more
effectively, extend distribution network and increase
Adding UBL to APBís list of regional ventures,
Mr Koh said, "APBís entry into Sri Lanka through its stake in
UBL has added one more piece to the Asian map for the growth of
the Group. Including UBL, APB now has interests in 22 brewery
operations in nine countries including Singapore, Malaysia,
Thailand, Vietnam, Cambodia, China, New Zealand, Papua New
Guinea and Sri Lanka. This investment is in line with our
regionalisation strategy to address the next wave of growth for