Thailand: Thai Beverage spending Bt7 billion to increase beer production

Thai Beverage Plc, the brewer of Chang Beer, is investing Bt7.25 billion to double the production capacity of its 1,900-rai brewery in Kamphaeng Phet, The Bangkok Post communicated on November 22.

After completing the expansion in September next year, the Kamphaeng Phet plant will increase its production capacity of Chang Beer and Archa Beer from a current 440 million litres per annum to more than 900 million litres, according to Dr Pisanu Vichiensanth, Thai Beverage director and senior vice president. He said the brewery would also increase its employment roll from 500 to 750.

Owned by whisky tycoon Charoen Siriwattanapakdi, Thai Beverage set up its third brewery at a cost of Bt8.2 billion in Kamphaeng Phet in 2000 to support its existing plants in Bang Ban and Wang Noi, which had reached 100-per-cent utilisation.

The company aims to be listed on the stock market but as yet has not because of opposition from certain consumer groups. “We will reorganise our logistics by increasing domestic territories to be taken care by our Kamphaeng Phet factory after the expansion, while changing the role of our breweries at Wang Noi and Bangban in Ayutthaya to focus on exports,” said Pisanu.

The Wang Noi brewery was set up in 1992, the Bangban plant in 1994. He said that the Wang Noi and Bangban breweries now had a production capacity of 120 million litres and 530 million litres per annum respectively, with both running at 91-per-cent capacity. “We have faced a limitation by the government’s policy to preserve supplies of artisan water in the central provinces, including Bangkok and Ayutthaya,” said Pisanu.

He added that the Kamphaeng Phet brewery would enjoy plenty of artisan water supplies for the next 100 years as it is located close to the Ping River.

Pisanu said that the Kamphaeng Phet brewery, responsible for the supply and distribution of Chang and Archa Beer to the northern and northeastern parts of the country, would increase its market territories in the central region. The Bangban and Wang Noi breweries will increase exports, in addition to covering domestic territories in the eastern and southern parts of the country.

Pisanu added that Thai Beverage was considering setting up a fourth brewery in Ayutthaya, or a nearby area. The new brewery, which will be located near the river for convenience and a plentiful supply of water, will support the Bangban and Wang Noi plants in supplying beer to growing domestic demand in eastern and southern Thailand as well as some export markets.

Thai Beverage has recently set up a subsidiary named International Beverages Co Ltd in Hong Kong to handle the search for new export markets for its beer and other alcoholic beverages.

The company currently exports Chang Beer to 18 markets in the Asia Pacific and Europe.

Pisanu said that the expansion of the Kamphaeng Phet brewery would help the company to supply more fresh beer to its customers by minimising the inventory period in its warehouses to no longer than 10 days, and no longer than six months on retail shelves. He said that the expansion of its Kamphaeng Phet plant would also supply increasing domestic demand in the future.

“Thai consumers currently consume 26 litres of beer per annum on average, up from only five litres about 10 years ago,” said Pisanu.

Pisanu said that Thai Beverage was now the second-largest brewer in Asia after Tsingtao of China, which operates 44 breweries. The group, which owns 63 production, distribution and marketing subsidiaries, produces alcoholic beverages including beer and Thai whisky from up- to downstream.

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