Kirin expands market share with Mandalay Brewery JV

Kirin Holdings has officially taken a stake in Mandalay Brewery, the brewer of Mandalay Lager Beer, Mandalay Strong Beer and Mandalay Spirulina Beer.

Japanese brewer Kirin Holdings and military-linked Myanmar Economic Holdings Limited (MEHL) signed an agreement on the joint venture in Yangon on Monday. The JV received approval from the Myanmar Investment Commission in August.

Under the JV, a total of $9 million will be invested in upgrading existing machinery and improving the beer quality at Mandalay Brewery.

Kirin will invest $4.3 million for a 51 percent stake in the JV, while MEHL will own the remaining 49pc in Mandalay Brewery, including machinery and land.

The brewery is currently located on 7.9 acres of land in Aung Myay Thar Zan township, Mandalay. It is the oldest and most iconic in Myanmar and has a capacity of 170,000 hectolitres per year. It is controlled by MEHL.

“The JV is for upgrading the machines and factory and upgrading the quality of the five beer brands Mandalay Brewery is currently producing. There are no plans to brew new products in the next six months,” said U Hla Myo, general manager of the planning department of the MEHL.

For Kirin, the JV represents an expansion of its market share in Myanmar at a time when competition for one of the last beer markets in Asia is heating up. Myanmar’s beer market is attractive as it has one of the lowest beer consumption rates in ASEAN, with per capita annual consumption of five liters, compared with 31 liters in Thailand and 36 in Vietnam, according to Heineken.

Kirin first bought a 55pc stake in Myanmar Brewery, which produces Myanmar Beer, in August 2015. The Japanese brewer bought the stake from Singapore-listed drinks maker Fraser and Neave (F&N) for $560 million.

Myanmar Beer enjoys the largest share of the country’s beer market. It was estimated to dominate a 64pc share of the market in 2014, according to a report by research consultancy Euromonitor International.

MEHL, which first bought Mandalay Brewery from the Ministry of Industry in 2009 for K8.3 billion, also has a 4pc stake in Myanmar Brewery, which it bought from Kirin for $40 million.

Since buying its stake in Myanmar Brewery, Kirin has launched several new brands in Myanmar, including Myanmar Premium, Kirin Ichiban and Black Knight Stout.

As Kirin and MEHL move strategically to shore up market share, foreign brewers Heineken and Carlsberg are not far behind. The two brewers have each already built their own breweries on the outskirts of Yangon.

Last month, Carlsberg opened its 1000th draught outlet in the country, four years after it first inked a joint venture with Myanmar Golden Star (MGS) to form Myanmar Carlsberg Co, and two years after it opened a $100 million brewery in Bago. The brewery has the capacity to brew up to 600,000 hectoliters of beer a year.

In Myanmar, Carlsberg brews its flagship beer as well as Tuborg and Yoma.

In October , Heineken Myanmar launched a new product, Tiger Crystal. The beer, which has lower alcohol content of 4.5pc, is expected to cater to the tastes of first-time beer drinkers in Myanmar.

Heineken also brews its flagship beer as well as Regal Seven, ABC Stout as well as Tiger Beer, which the Dutch company now brews after it bought Asia Pacific Breweries (APB) from F&N in 2013.

Source: Myanmar Times

To see the original article click link here

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, “Puma Energy”, “MOGE”, “yangon new town”,”MECTEL”, “hydropower”, etc.

.

Looking for foreign investors to invest in your business in Myanmar