ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Food & Beverage

ThaiBev CEO says beer business IPO still on table

Listing plan hinges on investors' outlook on pandemic

Thai Beverage brews Chang beer, an ubiquitous brand in Asia.  

BANGKOK -- Thai Beverage still considers the listing of its beer subsidiary as the most viable way of raising funds for further expansion, Southeast Asia's major brewer said on Thursday, as it sought to make clear its plans while the pandemic roils on.

"The IPO will certainly happen," said President and CEO Thapana Sirivadhanabhakdi at Thai Beverage's annual news conference, without specifying when the process will begin. "Based on compliance regulation, we have to seek approval from Singapore Exchange once again. Once we receive the approval, we will proceed," he said.

Thai Beverage is the brewer of Chang beer and a core member of billionaire Charoen Sirivadhanabhakdi's TCC Group. Thapana is the third of Charoen's five children.

The company had voiced its intention to spin off and list its beer business in 2019. Through internal restructuring, BeerCo was created in 2020 to streamline and consolidate ThaiBev's brewery business and operations.

An initial attempt was made in February. It announced a plan to sell a 20% stake in BeerCo through an initial public offering. The postponement of the listing came only after two and a half months.

The company blamed market uncertainty, "aggravated by the worsening COVID-19 pandemic in Thailand and other countries, which are not conducive for the proposed spin-off listing," according to a ThaiBev statement in April.

Despite such a volatile market, ThaiBev revenue in the nine months to end-June rose 1.2% from the same period a year ago to 80.2 billion baht ($2.37 billion). Its earnings before interest, taxes, depreciation and amortization jumped by 20.4% to 10.6 billion baht.

In the news conference, the company said it had quickly adjusted its sales channels to improve performance during the pandemic. It focused on selling in retail stores, instead of bars and restaurants, which were subject to closures due to the spread of COVID-19. It also worked on online sales in countries that permitted the selling of alcoholic beverages on the internet, unlike Thailand.

Despite its efforts, the capital markets are still shaky. "BeerCo's IPO depends on timing and readiness of investors," said Thapana. "It is because I have to protect ThaiBev shareholders' value in their best interest." Apart from the negative impact of the pandemic on some sectors, investors are also now nervous about a financial crunch rippling out from the China Evergrande crisis.

ThaiBev has been listed and traded on the Singapore Exchange since 2006. The parent company originally wanted a dual listing on home soil but canceled the proposal after receiving a thumbs-down from domestic activists. The consumption of alcoholic drinks is considered a bad habit in Buddhism, Thailand's main religion. BeerCo also faces the same resistance domestically.

TCC Group became one of Thailand's largest conglomerates through acquisitions. It bought Saigon Beer Alcohol Beverage, or Sabeco, in 2018 for $4.8 billion. It is thought that proceeds from the BeerCo IPO could also be used to fund acquisitions.

Meanwhile, ThaiBev said its brewing factory in Myanmar successfully ramped up production despite political instability after the military seized power in February and amid the COVID-19 outbreak. The factory has recently added a new canning line, according to Thapana.

The Myanmar factory operates under Fraser and Neave, TCC Group's food and beverage arm it acquired in 2013, instead of BeerCo. The move was aimed at avoiding any sanctions that could be slapped on BeerCo for operating in a junta-ruled country when it is seeking to list.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more