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Devonshire Capital Manila's San Miguel, Thai Life form distillery venture. San Miguel Corporation, Southeast Asia's largest food and beverage group, said on Tuesday it would form a joint venture with the Thai Life Group, a leader in the Thai insurance market, to build and operate a distillery business in Thailand. San Miguel said its local unit Ginebra San Miguel Inc. will acquire a 40 percent stake in C.N.T. Wine and Liquor Co. Ltd., a subsidiary of the Thai Life Group which owns a license to build and operate a distillery in Amphur Thamuang, Kanchanaburi, 120 kilometers northwest of Bangkok. The deal is the latest leg of a multi-million dollar expansion by San Miguel to boost its presence in seven Asia-Pacific countries. Devonshire Capital together with ING Corporate Finance provided the financial advisory support to C.N.T. Wine and Liquor Co. Ltd and Thai Life in the transaction. Thai Life, a leader in the Thai insurance market, will own 50 percent of the joint venture, with the remaining 10 percent to be held by minority shareholders. The joint venture will allow Thai Life Group to diversify its activities into the alcoholic beverage industry from its current leading position in the premium beer market. The group currently owns a majority of Thai Asia Pacific Brewery Co., Ltd., a manufacturer and distributor of Heineken and Tiger beer. Heineken currently has over 85 percent market share of the premium beer segment. The group expects that the new joint venture's Thai distillery which is under construction to be completed in 2006. Its nationwide distribution will provide access to the large and growing Thai liquor market with a size of approximately 800 million litres a year. With strong shareholders, the new venture will be able to take advantage of several synergies including technical expertise and product development from San Miguel and local knowledge and distribution from the Thai Life Group. Thailand's liquor market is expected to grow by five percent per year of which over 70 percent will be dominated by the local spirits market. The Thai Life Group's business activities correctly encompass three core areas including insurance, alcoholic beverages and hotel and property investment. The group is the leading local player in the Thai insurance market. In addition, the Thai Life Group has successful joint venture operations with the Cardif Insurance Group and the Accor Group. San Miguel Corporation is the largest consumer product manufacturer and distributor in the Philippines. The group's business portfolio ranges from beer, liquor, non-alcoholic beverages, food, agribusiness, packaging and real estate. Alcoholic beverages, mainly beer and liquor, represent over 33 percent of the group's sales revenue of P150,000 million (US$2.7 billion). In the liquor segment, San Miguel controls approximately 50 percent of the Philippines' liquor market through its subsidiary, Ginebra San Miguel, which is a unit that produces gin and rum. Its leading brands in liquor include Ginebra San Miguel, Grand Matador Brandy and Vino Kulafu. The group has pursued an aggressive expansion strategy throughout the region including Thailand, Vietnam, and Australia. In Thailand, the group recently made major investments including an acquisition of Thai Amarit Brewery in April 2004 and the establishment of a venture in Rayong Industrial Estate in August 2004 which will involve the manufacture and distribution of non-alcoholic beverages, processed food and food mills. |
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