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Berli Jucker in $60m venture

Berli Jucker Plc (BJC), one of Thailand’s biggest trading companies, has joined Ball Corporation, the world’s largest can producer, in entering the beverage can market in Vietnam.

BJC, through its subsidiary Thai Beverage Can Limited, yesterday signed an agreement with Ball to co-invest in a can packaging factory in Vietnam with a total investment cost of US$60 million (1.8 billion baht).

An equally owned joint venture, TBC Ball Beverage Can Vietnam, was set up with $20 million in registered capital.

The new aluminium can manufacturing plant, located in Bin Duong province, north of Ho Chi Minh City, is under construction and due to start operating fully in the second quarter of next year. In the first phase, the plant has a capacity to produce 850 million cans a year, 80% of which will serve the Vietnamese market.

Aswin Techajareonvikul, the BJC president and executive director of TBC, said Vietnam was very attractive for investment. It shows strong economic growth and has a population of 88 million, of whom 50% are the young working middle-class, who are open to new beverages.

“Global and regional beverage producers have entered Vietnam to invest and build their manufacturing bases to tap strong demand over there. This has led to a 15% rise in demand for aluminium can packaging per year,” he said.

Currently, demand for beverage cans in Vietnam is about four billion per year, or twice that of Thailand.

John Hayes, Ball’s president and CEO, said the move was an important part of a long-term strategy to expand Ball’s worldwide beverage can business.

TBC Ball Beverage Can Vietnam is the second joint venture for BJC in the country after a glass venture.

“With Ball’s strengths in technology and the know-how and regional experience of BJC, we expect TBC Ball Beverage Can will become a market leader in Vietnam’s beverage can and a leading operator in Indochina in the future,” Mr Aswin said.

He added that Vietnam had a strong competitive advantage as a manufacturing base given its steadily rising consumption growth rate. In addition, its geographical location provides a key strategic advantage as a good manufacturing base to distribute products to southern China.

“Vietnam is a vibrant and growing country. Its economic growth and consumers’ preference for canned beverages continue to raise demand for our containers,” Mr Hayes said.

TBC Ball Beverage Can expects to sell about 400 million cans worth about one billion baht per year in Vietnam.

BJC also plans to open a new tissue paper factory costing 50-80 million baht in Ho Chi Minh City next year.

Shares of BJC closed yesterday on the SET at 18.60 baht, down 20 satang, in trade worth 21.14 million baht.

Source: Bangkok Post

ThaiVest Editorial Team