BANGKOK -- Thailand's two major beer-makers have been stepping up their property development businesses in a bid to bolster revenue.
The truth is, it's becoming harder to sell beer and liquor in Thailand. In March, the government created a national sports development fund and said its coffers would be filled by producers of cigarettes and alcohol. The move effectively pushed up the tax on alcohol by 2%. Before that, the government limited the hours during which beer and spirits can be sold.
So what are the parent companies of Chang and Singha beers to do?
TCC Land, a property development subsidiary of Thai Charoen Corporation (TCC) Group, where Chang Beer comes from, plans to invest 20 billion baht ($600 million) by 2019 in hotels and commercial complexes.
TCC Land recently split off its hotel unit as well as a commercial and office building business to facilitate speedy decision-making.
TCC Land's Retail Group operates its signature shopping complex, Asiatique the Riverfront, along the Chao Phraya River in central Bangkok. The company now plans to open Asiatiques in three smaller cities popular among foreign tourists: Chiang Mai, in northern Thailand; Hua Hin, southwest of Bangkok; and Pattaya, southeast of the capital. Total investment is likely to reach 2.2 billion baht.
Meanwhile, the Singha Corporation plans to spend 100 billion baht during the next five years to develop large commercial complexes in Bangkok and elsewhere.
Singha in April acquired Rasa Property Development, then changed the company's name to Singha Estate. The developer is now planning to put up something called Singha Complex in Bangkok. The 16,000-sq.-meter facility will include retail shops, a hotel and office towers.
Construction is expected to start this year, and the complex is to open by 2017.
In addition, the company is planning to buy two hotels, one in Phuket, as well as an office building and other properties in Bangkok later this year.
Singha Estate intends to push ahead with other acquisitions and achieve an ambitious goal of increasing sales about tenfold to 20 billion baht by 2019.
For TCC and Singha, developing and operating properties is a way to bolster their earnings structure as domestic alcohol sales slow. Thailand's beer market is estimated to grow only around 3% in 2015, according to Singha.