Thai Beverage Public Company

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#21
So let us summarise the possibilities again:
1. TB will lose its APB stake to Heineken
2. It will strive to own 50- 70% of F & N. It will not want to take F & N private. The offer to buy will remain $8.88 but will be calibrated so that the desired % will be achieved.
3. TB may spin off the property business but if they cannot sell it, they may just do an IPO. This is to extract as much value as possible in order to pare down their huge gearing.
4. They might sell off the printing business as there is little synergism with their drinks business.
5. At the end of it they will retain only the consumer business which fits in very nicely with their current strategy.
6. The new TB post- F&N takeover will be a different animal; it will be a huge company and thus pave the way for it to be included again into the STI.

BTW, think a lot of people shorted the coy in the past few days.

The above is conjectural. Therefore Caveat Emptor
Reply
#21
So let us summarise the possibilities again:
1. TB will lose its APB stake to Heineken
2. It will strive to own 50- 70% of F & N. It will not want to take F & N private. The offer to buy will remain $8.88 but will be calibrated so that the desired % will be achieved.
3. TB may spin off the property business but if they cannot sell it, they may just do an IPO. This is to extract as much value as possible in order to pare down their huge gearing.
4. They might sell off the printing business as there is little synergism with their drinks business.
5. At the end of it they will retain only the consumer business which fits in very nicely with their current strategy.
6. The new TB post- F&N takeover will be a different animal; it will be a huge company and thus pave the way for it to be included again into the STI.

BTW, think a lot of people shorted the coy in the past few days.

The above is conjectural. Therefore Caveat Emptor
Reply
#22
TB might not like F&N's property business, maybe TCC likes it.

it might not spin off the property business, or not yet.

What's important for TB is to have a say in F&N's soft drink business and to leverage on F&N's soft drink and dairy business.
Reply
#22
TB might not like F&N's property business, maybe TCC likes it.

it might not spin off the property business, or not yet.

What's important for TB is to have a say in F&N's soft drink business and to leverage on F&N's soft drink and dairy business.
Reply
#23
ThaiBev settled its short term loan to finance purchase of F & N shares to a 5-year loan. It seems that ThaiBev will unlikely give up its stake.

Whether TCC raises the offer or not, it does not affect ThaiBev that much, as ThaiBev is not buying any more F & N shares.
Reply
#23
ThaiBev settled its short term loan to finance purchase of F & N shares to a 5-year loan. It seems that ThaiBev will unlikely give up its stake.

Whether TCC raises the offer or not, it does not affect ThaiBev that much, as ThaiBev is not buying any more F & N shares.
Reply
#24
(05-12-2012, 10:04 AM)freedom Wrote: ThaiBev settled its short term loan to finance purchase of F & N shares to a 5-year loan. It seems that ThaiBev will unlikely give up its stake.

Whether TCC raises the offer or not, it does not affect ThaiBev that much, as ThaiBev is not buying any more F & N shares.

This serves as another edge over OUE in the battle.

Next milestone is 11 Dec, TCC next closing date which is 4 working days away.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
#24
(05-12-2012, 10:04 AM)freedom Wrote: ThaiBev settled its short term loan to finance purchase of F & N shares to a 5-year loan. It seems that ThaiBev will unlikely give up its stake.

Whether TCC raises the offer or not, it does not affect ThaiBev that much, as ThaiBev is not buying any more F & N shares.

This serves as another edge over OUE in the battle.

Next milestone is 11 Dec, TCC next closing date which is 4 working days away.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
#25
Shall we now start looking at this company again? Smile
Reply
#25
Shall we now start looking at this company again? Smile
Reply
#26
The battle with OUE in taking control of F&N somehow shows its management's astute, isn't it? Right strategy to finally buy out 50% at a considerably reasonable cost.

Can they run the company (F&N) better than the eager outgoing management?

And with the expansion of distribution network, probably we will see more Thai beers and spirits around.
Reply
#26
The battle with OUE in taking control of F&N somehow shows its management's astute, isn't it? Right strategy to finally buy out 50% at a considerably reasonable cost.

Can they run the company (F&N) better than the eager outgoing management?

And with the expansion of distribution network, probably we will see more Thai beers and spirits around.
Reply
#27
http://bizdaily.com.sg/newsite/pepsi-sud...r-breakup/

Note: Serm Suk is 64.66% owned by ThaiBev according to ThaiBev's 2011 Annual Report

Pepsi Suddenly Scarce in Thailand after Bottler Breakup

The day after PepsiCo Inc’s bottling deal in Thailand expired, its partner of 59 years launched its own soft drink that has knocked Pepsi off store shelves.

Serm Suk Pcl, backed by the billionaire owner of Thai Beverage Pcl, Charoen Sirivadhanabhakdi, said its new soda called “est” garnered 19 per cent of Thailand’s US$1.8 billion cola market in just two months following its November 2 launch.

Hot Deals


Pepsi’s breakup with its bottler meant it also lost access to Serm Suk’s vast distribution network, which delivers drinks to about 200,000 stores, restaurants and vending machines serving Thailand’s market of 67 million people.

The two companies had a non-compete clause that expired when their contract ended on November 1. Pepsi has similar non-compete clauses with bottlers in other markets such as China, but the decision backfired in Thailand.

Hot Deals

The following day, est hit the market, costing about the same as Pepsi and sold in the same bottles, with a red, white and blue logo reminiscent of Pepsi’s. Pepsi declined to comment on whether it was pursuing any trademark violation claim.

“We did not deliberately set out to push Pepsi off the shelves but we have a very strong distribution network and if we stop distributing for one company, that company’s products will disappear from the shelves,” Pragnee Chaipidej, advertising manager at Serm Suk, said in an interview.

She declined to comment on similarities of est to Pepsi.

Thailand was one of the few countries where Pepsi’s cola drink outsold arch-rival Coca-Cola Co’s, but Coke caught up in 2011 and built a lead last year, according to data from research firm Euromonitor International.

Euromonitor’s figures show Pepsi’s share of the cola market dipped by 2.6 percentage points to 36.1 per cent in 2012, compared with Coke’s 40.1 per cent. Est, a name that has no meaning in Thai but was intended as a play on superlatives such as “biggest” or “tastiest”, debuted at 2.1 per cent even though it was available for only two months of the year.

“We welcome competition, and short-term fluctuation in market share is not our barometer for success,” said Jeff Dahncke, senior communications director at PepsiCo in Purchase, New York.

Pepsi has opened a US$170 million bottling plant in Rayong, 179 kilometres southeast of Bangkok, which it said can produce enough drinks to serve every consumer in Thailand. It partnered with Deutsche Post AG’s DHL for distribution. Dahncke said the first phase of distribution, which involves getting drinks into chain stores, was in place. The next phase is smaller mom-and-pop shops.

The Thailand trouble stands in contrast to PepsiCo’s global performance, which has propelled its shares to their highest level since 2008. The company reported stronger-than-expected fourth-quarter results last week and raised its dividend.

Much of its recent success stems from a turnaround in its North American operations, which account for half of the company’s global revenue, and strong growth in sales of food. The Middle East, Asia and Africa unit contributed only about 10 per cent of total revenue in 2012. The company does not break out figures for Thailand.

Pepsi uses its own distribution for snacks in Thailand, so that business is unaffected. But its soft drinks aren’t reaching the same market as they were before the Serm Suk partnership ended.

“What we have seen is a major drop in distribution and availability of Pepsi products,” said Shakir Moin, Coca-Cola’s marketing director for Southeast Asia.

Customers have also noticed Pepsi’s absence from restaurant menus and store shelves, and this has become a hot topic of discussion on blog posts and social media.

“It’s pretty much impossible to find a bottle of Pepsi these days,” said Itiporn Lakarnchua who works for an English-language radio station in Bangkok, adding that est tasted “much sweeter and more peppery” than Pepsi or Coke.

Pepsi has a long history in Thailand, entering the market in 1952 with Serm Suk at its side. But the relationship shifted in 2010 when Pepsi and its joint-venture partner Strategic Beverages launched a hostile takeover bid.

Pepsi’s group failed to acquire the targeted number of shares and dropped the tender. ThaiBev’s Charoen later bought Pepsi’s stake.

By January 2011, Serm Suk’s board was developing plans for how it might operate without Pepsi, according to documents filed with the securities exchange. Their exclusive bottling agreement was terminated in April 2011, and the two officially parted ways on November 1, 2012.

Serm Suk’s “Future Business Plan” laid out two scenarios, one in which the company continued its Pepsi partnership, and one that envisioned a future flying solo, according to the filings.

Under the standalone scenario, the plan called for expanding its offering of non-carbonated drinks such as juices; building up the drinking water business; distributing more food and drinks – and making carbonated soft drinks under a different brand.

“There’s a very good chance that est cola will become the number two cola brand in Thailand after Coca-Cola, pushing Pepsi to third place,” said Pragrom Pathomboorn, an analyst at KGI Securities in Bangkok.

Pepsi declined to comment on why its non-compete clause expired immediately upon conclusion of the Serm Suk deal. It was not clear whether Coke or other companies also have non-compete clauses that run only through the life of the contract.

Distribution is the secret to Serm Suk’s swift success in Thailand. With 200,000 outlets selling its products, it was able to quickly flood the market.

Thais are the biggest carbonated soft drink consumers in Southeast Asia, drinking on average 39.2 litres per year, more than four times the per capita consumption across Asia-Pacific, according to Euromonitor.

That helps explain why drinks companies are investing so heavily in this market.

Serm Suk spent about US$10 million on a marketing campaign starring three Thai teen pop idols to introduce est, and has budgeted triple that amount for the full year. It plans to launch more flavoured soft drinks later this year.

Pepsi’s new plant is part of a US$600 million investment that also includes new marketing campaigns and a partnership with Bodyslam, a popular Thai music group.

PepsiCo’s Dahncke said the new bottling plant and DHL deal would soon get its soft drinks back into the hands of customers.

“This is a business model we use successfully in other markets around the world,” he said. “There is a brief transition period to get our new system ramped up, but we are very much on track.”
Reply
#27
http://bizdaily.com.sg/newsite/pepsi-sud...r-breakup/

Note: Serm Suk is 64.66% owned by ThaiBev according to ThaiBev's 2011 Annual Report

Pepsi Suddenly Scarce in Thailand after Bottler Breakup

The day after PepsiCo Inc’s bottling deal in Thailand expired, its partner of 59 years launched its own soft drink that has knocked Pepsi off store shelves.

Serm Suk Pcl, backed by the billionaire owner of Thai Beverage Pcl, Charoen Sirivadhanabhakdi, said its new soda called “est” garnered 19 per cent of Thailand’s US$1.8 billion cola market in just two months following its November 2 launch.

Hot Deals


Pepsi’s breakup with its bottler meant it also lost access to Serm Suk’s vast distribution network, which delivers drinks to about 200,000 stores, restaurants and vending machines serving Thailand’s market of 67 million people.

The two companies had a non-compete clause that expired when their contract ended on November 1. Pepsi has similar non-compete clauses with bottlers in other markets such as China, but the decision backfired in Thailand.

Hot Deals

The following day, est hit the market, costing about the same as Pepsi and sold in the same bottles, with a red, white and blue logo reminiscent of Pepsi’s. Pepsi declined to comment on whether it was pursuing any trademark violation claim.

“We did not deliberately set out to push Pepsi off the shelves but we have a very strong distribution network and if we stop distributing for one company, that company’s products will disappear from the shelves,” Pragnee Chaipidej, advertising manager at Serm Suk, said in an interview.

She declined to comment on similarities of est to Pepsi.

Thailand was one of the few countries where Pepsi’s cola drink outsold arch-rival Coca-Cola Co’s, but Coke caught up in 2011 and built a lead last year, according to data from research firm Euromonitor International.

Euromonitor’s figures show Pepsi’s share of the cola market dipped by 2.6 percentage points to 36.1 per cent in 2012, compared with Coke’s 40.1 per cent. Est, a name that has no meaning in Thai but was intended as a play on superlatives such as “biggest” or “tastiest”, debuted at 2.1 per cent even though it was available for only two months of the year.

“We welcome competition, and short-term fluctuation in market share is not our barometer for success,” said Jeff Dahncke, senior communications director at PepsiCo in Purchase, New York.

Pepsi has opened a US$170 million bottling plant in Rayong, 179 kilometres southeast of Bangkok, which it said can produce enough drinks to serve every consumer in Thailand. It partnered with Deutsche Post AG’s DHL for distribution. Dahncke said the first phase of distribution, which involves getting drinks into chain stores, was in place. The next phase is smaller mom-and-pop shops.

The Thailand trouble stands in contrast to PepsiCo’s global performance, which has propelled its shares to their highest level since 2008. The company reported stronger-than-expected fourth-quarter results last week and raised its dividend.

Much of its recent success stems from a turnaround in its North American operations, which account for half of the company’s global revenue, and strong growth in sales of food. The Middle East, Asia and Africa unit contributed only about 10 per cent of total revenue in 2012. The company does not break out figures for Thailand.

Pepsi uses its own distribution for snacks in Thailand, so that business is unaffected. But its soft drinks aren’t reaching the same market as they were before the Serm Suk partnership ended.

“What we have seen is a major drop in distribution and availability of Pepsi products,” said Shakir Moin, Coca-Cola’s marketing director for Southeast Asia.

Customers have also noticed Pepsi’s absence from restaurant menus and store shelves, and this has become a hot topic of discussion on blog posts and social media.

“It’s pretty much impossible to find a bottle of Pepsi these days,” said Itiporn Lakarnchua who works for an English-language radio station in Bangkok, adding that est tasted “much sweeter and more peppery” than Pepsi or Coke.

Pepsi has a long history in Thailand, entering the market in 1952 with Serm Suk at its side. But the relationship shifted in 2010 when Pepsi and its joint-venture partner Strategic Beverages launched a hostile takeover bid.

Pepsi’s group failed to acquire the targeted number of shares and dropped the tender. ThaiBev’s Charoen later bought Pepsi’s stake.

By January 2011, Serm Suk’s board was developing plans for how it might operate without Pepsi, according to documents filed with the securities exchange. Their exclusive bottling agreement was terminated in April 2011, and the two officially parted ways on November 1, 2012.

Serm Suk’s “Future Business Plan” laid out two scenarios, one in which the company continued its Pepsi partnership, and one that envisioned a future flying solo, according to the filings.

Under the standalone scenario, the plan called for expanding its offering of non-carbonated drinks such as juices; building up the drinking water business; distributing more food and drinks – and making carbonated soft drinks under a different brand.

“There’s a very good chance that est cola will become the number two cola brand in Thailand after Coca-Cola, pushing Pepsi to third place,” said Pragrom Pathomboorn, an analyst at KGI Securities in Bangkok.

Pepsi declined to comment on why its non-compete clause expired immediately upon conclusion of the Serm Suk deal. It was not clear whether Coke or other companies also have non-compete clauses that run only through the life of the contract.

Distribution is the secret to Serm Suk’s swift success in Thailand. With 200,000 outlets selling its products, it was able to quickly flood the market.

Thais are the biggest carbonated soft drink consumers in Southeast Asia, drinking on average 39.2 litres per year, more than four times the per capita consumption across Asia-Pacific, according to Euromonitor.

That helps explain why drinks companies are investing so heavily in this market.

Serm Suk spent about US$10 million on a marketing campaign starring three Thai teen pop idols to introduce est, and has budgeted triple that amount for the full year. It plans to launch more flavoured soft drinks later this year.

Pepsi’s new plant is part of a US$600 million investment that also includes new marketing campaigns and a partnership with Bodyslam, a popular Thai music group.

PepsiCo’s Dahncke said the new bottling plant and DHL deal would soon get its soft drinks back into the hands of customers.

“This is a business model we use successfully in other markets around the world,” he said. “There is a brief transition period to get our new system ramped up, but we are very much on track.”
Reply
#28
Anyone has view on TB? vested

(23-02-2013, 10:13 AM)rogerwilco Wrote: http://bizdaily.com.sg/newsite/pepsi-sud...r-breakup/

Note: Serm Suk is 64.66% owned by ThaiBev according to ThaiBev's 2011 Annual Report

Pepsi Suddenly Scarce in Thailand after Bottler Breakup

The day after PepsiCo Inc’s bottling deal in Thailand expired, its partner of 59 years launched its own soft drink that has knocked Pepsi off store shelves.

Serm Suk Pcl, backed by the billionaire owner of Thai Beverage Pcl, Charoen Sirivadhanabhakdi, said its new soda called “est” garnered 19 per cent of Thailand’s US$1.8 billion cola market in just two months following its November 2 launch.

Hot Deals


Pepsi’s breakup with its bottler meant it also lost access to Serm Suk’s vast distribution network, which delivers drinks to about 200,000 stores, restaurants and vending machines serving Thailand’s market of 67 million people.

The two companies had a non-compete clause that expired when their contract ended on November 1. Pepsi has similar non-compete clauses with bottlers in other markets such as China, but the decision backfired in Thailand.

Hot Deals

The following day, est hit the market, costing about the same as Pepsi and sold in the same bottles, with a red, white and blue logo reminiscent of Pepsi’s. Pepsi declined to comment on whether it was pursuing any trademark violation claim.

“We did not deliberately set out to push Pepsi off the shelves but we have a very strong distribution network and if we stop distributing for one company, that company’s products will disappear from the shelves,” Pragnee Chaipidej, advertising manager at Serm Suk, said in an interview.

She declined to comment on similarities of est to Pepsi.

Thailand was one of the few countries where Pepsi’s cola drink outsold arch-rival Coca-Cola Co’s, but Coke caught up in 2011 and built a lead last year, according to data from research firm Euromonitor International.

Euromonitor’s figures show Pepsi’s share of the cola market dipped by 2.6 percentage points to 36.1 per cent in 2012, compared with Coke’s 40.1 per cent. Est, a name that has no meaning in Thai but was intended as a play on superlatives such as “biggest” or “tastiest”, debuted at 2.1 per cent even though it was available for only two months of the year.

“We welcome competition, and short-term fluctuation in market share is not our barometer for success,” said Jeff Dahncke, senior communications director at PepsiCo in Purchase, New York.

Pepsi has opened a US$170 million bottling plant in Rayong, 179 kilometres southeast of Bangkok, which it said can produce enough drinks to serve every consumer in Thailand. It partnered with Deutsche Post AG’s DHL for distribution. Dahncke said the first phase of distribution, which involves getting drinks into chain stores, was in place. The next phase is smaller mom-and-pop shops.

The Thailand trouble stands in contrast to PepsiCo’s global performance, which has propelled its shares to their highest level since 2008. The company reported stronger-than-expected fourth-quarter results last week and raised its dividend.

Much of its recent success stems from a turnaround in its North American operations, which account for half of the company’s global revenue, and strong growth in sales of food. The Middle East, Asia and Africa unit contributed only about 10 per cent of total revenue in 2012. The company does not break out figures for Thailand.

Pepsi uses its own distribution for snacks in Thailand, so that business is unaffected. But its soft drinks aren’t reaching the same market as they were before the Serm Suk partnership ended.

“What we have seen is a major drop in distribution and availability of Pepsi products,” said Shakir Moin, Coca-Cola’s marketing director for Southeast Asia.

Customers have also noticed Pepsi’s absence from restaurant menus and store shelves, and this has become a hot topic of discussion on blog posts and social media.

“It’s pretty much impossible to find a bottle of Pepsi these days,” said Itiporn Lakarnchua who works for an English-language radio station in Bangkok, adding that est tasted “much sweeter and more peppery” than Pepsi or Coke.

Pepsi has a long history in Thailand, entering the market in 1952 with Serm Suk at its side. But the relationship shifted in 2010 when Pepsi and its joint-venture partner Strategic Beverages launched a hostile takeover bid.

Pepsi’s group failed to acquire the targeted number of shares and dropped the tender. ThaiBev’s Charoen later bought Pepsi’s stake.

By January 2011, Serm Suk’s board was developing plans for how it might operate without Pepsi, according to documents filed with the securities exchange. Their exclusive bottling agreement was terminated in April 2011, and the two officially parted ways on November 1, 2012.

Serm Suk’s “Future Business Plan” laid out two scenarios, one in which the company continued its Pepsi partnership, and one that envisioned a future flying solo, according to the filings.

Under the standalone scenario, the plan called for expanding its offering of non-carbonated drinks such as juices; building up the drinking water business; distributing more food and drinks – and making carbonated soft drinks under a different brand.

“There’s a very good chance that est cola will become the number two cola brand in Thailand after Coca-Cola, pushing Pepsi to third place,” said Pragrom Pathomboorn, an analyst at KGI Securities in Bangkok.

Pepsi declined to comment on why its non-compete clause expired immediately upon conclusion of the Serm Suk deal. It was not clear whether Coke or other companies also have non-compete clauses that run only through the life of the contract.

Distribution is the secret to Serm Suk’s swift success in Thailand. With 200,000 outlets selling its products, it was able to quickly flood the market.

Thais are the biggest carbonated soft drink consumers in Southeast Asia, drinking on average 39.2 litres per year, more than four times the per capita consumption across Asia-Pacific, according to Euromonitor.

That helps explain why drinks companies are investing so heavily in this market.

Serm Suk spent about US$10 million on a marketing campaign starring three Thai teen pop idols to introduce est, and has budgeted triple that amount for the full year. It plans to launch more flavoured soft drinks later this year.

Pepsi’s new plant is part of a US$600 million investment that also includes new marketing campaigns and a partnership with Bodyslam, a popular Thai music group.

PepsiCo’s Dahncke said the new bottling plant and DHL deal would soon get its soft drinks back into the hands of customers.

“This is a business model we use successfully in other markets around the world,” he said. “There is a brief transition period to get our new system ramped up, but we are very much on track.”
Reply
#28
Anyone has view on TB? vested

(23-02-2013, 10:13 AM)rogerwilco Wrote: http://bizdaily.com.sg/newsite/pepsi-sud...r-breakup/

Note: Serm Suk is 64.66% owned by ThaiBev according to ThaiBev's 2011 Annual Report

Pepsi Suddenly Scarce in Thailand after Bottler Breakup

The day after PepsiCo Inc’s bottling deal in Thailand expired, its partner of 59 years launched its own soft drink that has knocked Pepsi off store shelves.

Serm Suk Pcl, backed by the billionaire owner of Thai Beverage Pcl, Charoen Sirivadhanabhakdi, said its new soda called “est” garnered 19 per cent of Thailand’s US$1.8 billion cola market in just two months following its November 2 launch.

Hot Deals


Pepsi’s breakup with its bottler meant it also lost access to Serm Suk’s vast distribution network, which delivers drinks to about 200,000 stores, restaurants and vending machines serving Thailand’s market of 67 million people.

The two companies had a non-compete clause that expired when their contract ended on November 1. Pepsi has similar non-compete clauses with bottlers in other markets such as China, but the decision backfired in Thailand.

Hot Deals

The following day, est hit the market, costing about the same as Pepsi and sold in the same bottles, with a red, white and blue logo reminiscent of Pepsi’s. Pepsi declined to comment on whether it was pursuing any trademark violation claim.

“We did not deliberately set out to push Pepsi off the shelves but we have a very strong distribution network and if we stop distributing for one company, that company’s products will disappear from the shelves,” Pragnee Chaipidej, advertising manager at Serm Suk, said in an interview.

She declined to comment on similarities of est to Pepsi.

Thailand was one of the few countries where Pepsi’s cola drink outsold arch-rival Coca-Cola Co’s, but Coke caught up in 2011 and built a lead last year, according to data from research firm Euromonitor International.

Euromonitor’s figures show Pepsi’s share of the cola market dipped by 2.6 percentage points to 36.1 per cent in 2012, compared with Coke’s 40.1 per cent. Est, a name that has no meaning in Thai but was intended as a play on superlatives such as “biggest” or “tastiest”, debuted at 2.1 per cent even though it was available for only two months of the year.

“We welcome competition, and short-term fluctuation in market share is not our barometer for success,” said Jeff Dahncke, senior communications director at PepsiCo in Purchase, New York.

Pepsi has opened a US$170 million bottling plant in Rayong, 179 kilometres southeast of Bangkok, which it said can produce enough drinks to serve every consumer in Thailand. It partnered with Deutsche Post AG’s DHL for distribution. Dahncke said the first phase of distribution, which involves getting drinks into chain stores, was in place. The next phase is smaller mom-and-pop shops.

The Thailand trouble stands in contrast to PepsiCo’s global performance, which has propelled its shares to their highest level since 2008. The company reported stronger-than-expected fourth-quarter results last week and raised its dividend.

Much of its recent success stems from a turnaround in its North American operations, which account for half of the company’s global revenue, and strong growth in sales of food. The Middle East, Asia and Africa unit contributed only about 10 per cent of total revenue in 2012. The company does not break out figures for Thailand.

Pepsi uses its own distribution for snacks in Thailand, so that business is unaffected. But its soft drinks aren’t reaching the same market as they were before the Serm Suk partnership ended.

“What we have seen is a major drop in distribution and availability of Pepsi products,” said Shakir Moin, Coca-Cola’s marketing director for Southeast Asia.

Customers have also noticed Pepsi’s absence from restaurant menus and store shelves, and this has become a hot topic of discussion on blog posts and social media.

“It’s pretty much impossible to find a bottle of Pepsi these days,” said Itiporn Lakarnchua who works for an English-language radio station in Bangkok, adding that est tasted “much sweeter and more peppery” than Pepsi or Coke.

Pepsi has a long history in Thailand, entering the market in 1952 with Serm Suk at its side. But the relationship shifted in 2010 when Pepsi and its joint-venture partner Strategic Beverages launched a hostile takeover bid.

Pepsi’s group failed to acquire the targeted number of shares and dropped the tender. ThaiBev’s Charoen later bought Pepsi’s stake.

By January 2011, Serm Suk’s board was developing plans for how it might operate without Pepsi, according to documents filed with the securities exchange. Their exclusive bottling agreement was terminated in April 2011, and the two officially parted ways on November 1, 2012.

Serm Suk’s “Future Business Plan” laid out two scenarios, one in which the company continued its Pepsi partnership, and one that envisioned a future flying solo, according to the filings.

Under the standalone scenario, the plan called for expanding its offering of non-carbonated drinks such as juices; building up the drinking water business; distributing more food and drinks – and making carbonated soft drinks under a different brand.

“There’s a very good chance that est cola will become the number two cola brand in Thailand after Coca-Cola, pushing Pepsi to third place,” said Pragrom Pathomboorn, an analyst at KGI Securities in Bangkok.

Pepsi declined to comment on why its non-compete clause expired immediately upon conclusion of the Serm Suk deal. It was not clear whether Coke or other companies also have non-compete clauses that run only through the life of the contract.

Distribution is the secret to Serm Suk’s swift success in Thailand. With 200,000 outlets selling its products, it was able to quickly flood the market.

Thais are the biggest carbonated soft drink consumers in Southeast Asia, drinking on average 39.2 litres per year, more than four times the per capita consumption across Asia-Pacific, according to Euromonitor.

That helps explain why drinks companies are investing so heavily in this market.

Serm Suk spent about US$10 million on a marketing campaign starring three Thai teen pop idols to introduce est, and has budgeted triple that amount for the full year. It plans to launch more flavoured soft drinks later this year.

Pepsi’s new plant is part of a US$600 million investment that also includes new marketing campaigns and a partnership with Bodyslam, a popular Thai music group.

PepsiCo’s Dahncke said the new bottling plant and DHL deal would soon get its soft drinks back into the hands of customers.

“This is a business model we use successfully in other markets around the world,” he said. “There is a brief transition period to get our new system ramped up, but we are very much on track.”
Reply
#29
Hi Value Buddies

I work in the FMCG industry myself and used to work in the beer trade. All I can say is this, it's a business that gives you money (especially more so in this part of the world). I still have some of my regional contacts in Indochina and they told me that Thai Beverage is going to enter Myanmar big time. At the same time, Thailand has quite a bit of footprints around Indochina due to proximity as well as the cash factor. I won't be surprised if Thai Beverage surge on the basis of such sentiments. Saying that, they might face competition from APB (and now Heineken), but I suspect APB will be facing internal restructuring issues and will take a couple of years to get on their feet and do the right thing.

On a fundamental level, I am not so sure about buying Thai Bev shares now as I felt that the ratios seem to be over valued right now. I will prefer to wait and see how they get their act together. And not forgetting they themselves need some time to sort themselves out after the purchase of FNN as well.

Vested
Reply
#29
Hi Value Buddies

I work in the FMCG industry myself and used to work in the beer trade. All I can say is this, it's a business that gives you money (especially more so in this part of the world). I still have some of my regional contacts in Indochina and they told me that Thai Beverage is going to enter Myanmar big time. At the same time, Thailand has quite a bit of footprints around Indochina due to proximity as well as the cash factor. I won't be surprised if Thai Beverage surge on the basis of such sentiments. Saying that, they might face competition from APB (and now Heineken), but I suspect APB will be facing internal restructuring issues and will take a couple of years to get on their feet and do the right thing.

On a fundamental level, I am not so sure about buying Thai Bev shares now as I felt that the ratios seem to be over valued right now. I will prefer to wait and see how they get their act together. And not forgetting they themselves need some time to sort themselves out after the purchase of FNN as well.

Vested
Reply
#30
Hi Smalkmus, thanks for the info.

I believe the integration with FNN has started, saw a series of IDs stepped down today


(26-02-2013, 10:53 PM)smalkmus Wrote: Hi Value Buddies

I work in the FMCG industry myself and used to work in the beer trade. All I can say is this, it's a business that gives you money (especially more so in this part of the world). I still have some of my regional contacts in Indochina and they told me that Thai Beverage is going to enter Myanmar big time. At the same time, Thailand has quite a bit of footprints around Indochina due to proximity as well as the cash factor. I won't be surprised if Thai Beverage surge on the basis of such sentiments. Saying that, they might face competition from APB (and now Heineken), but I suspect APB will be facing internal restructuring issues and will take a couple of years to get on their feet and do the right thing.

On a fundamental level, I am not so sure about buying Thai Bev shares now as I felt that the ratios seem to be over valued right now. I will prefer to wait and see how they get their act together. And not forgetting they themselves need some time to sort themselves out after the purchase of FNN as well.

Vested
Reply
#30
Hi Smalkmus, thanks for the info.

I believe the integration with FNN has started, saw a series of IDs stepped down today


(26-02-2013, 10:53 PM)smalkmus Wrote: Hi Value Buddies

I work in the FMCG industry myself and used to work in the beer trade. All I can say is this, it's a business that gives you money (especially more so in this part of the world). I still have some of my regional contacts in Indochina and they told me that Thai Beverage is going to enter Myanmar big time. At the same time, Thailand has quite a bit of footprints around Indochina due to proximity as well as the cash factor. I won't be surprised if Thai Beverage surge on the basis of such sentiments. Saying that, they might face competition from APB (and now Heineken), but I suspect APB will be facing internal restructuring issues and will take a couple of years to get on their feet and do the right thing.

On a fundamental level, I am not so sure about buying Thai Bev shares now as I felt that the ratios seem to be over valued right now. I will prefer to wait and see how they get their act together. And not forgetting they themselves need some time to sort themselves out after the purchase of FNN as well.

Vested
Reply


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