Thailand’s Malee Group Pcl, known for its wide range of fruit juices and canned fruit, has acquired Vietnamese beverage firm, Long Quan Safe Food JSC (Long Quan) for Bt 330 million (US$10.5 million) to drive South East Asian (ASEAN) production and export sales.
Malee will take 65% ownership of Long Quan. The goal of the acquisition is to increase Malee`s production base for emerging markets within ASEAN and help to drive the company`s overseas revenue from 40% to 60% over the next 3 years.
“This will enhance our competitive advantage in serving the needs of middle-to-lower income consumers in the ASEAN region. This acquisition is part of Malee`s strategic move to tap into overseas markets, helping to pave the way for the company to achieve our mission of becoming a health-driven global F&B firm by 2021,” said Opas Lopansri, Senior Vice-President of International Business, Malee Group.
The acquisition of Long Quan bring a number of benefits to Malee amongst which is Long Quan’s good reputation and credibility as a 25 year old establishment with products that are well accepted among Vietnamese consumers. In addition, Long Quan’s integrated production can produce 300 million litres of beverages per year in a high-quality and cost-effective manner. The beverage firm produces a wide variety of products including water, carbonated soft drinks and jelly drinks, in a range of packaging formats such as cans, PET bottles, plastic cups, and glass bottles. This will effectively expand Malee’s total production capacity to 630 million litres per year. Malee also believes that Long Quan’s competitive pricing in the market is an essential factor for success in the emerging markets in ASEAN. In addition, Long Quan’s wide distribution network in Vietnam will set Malee apart from competitors as it can reach almost all the regions of Vietnam, and is especially strong in the southern regions.
Apart from Long Quan, Malee also has joint venture in the Philippines as Monde Malee Beverage Corporation, and in Indonesia as PT Kino Malee (Indonesia). By acquiring Long Quan, Malee could synergise the strengths of each partners and build a strong regional network and accelerate growth in the ASEAN region.
“We are confident that this acquisition will greatly benefit our international business, as we establish Long Quan as a manufacturing hub serving mass market consumers in Vietnam, Thailand, Philippines, Indonesia, and our other key markets in the ASEAN region. We expect this acquisition to help increase the proportion of our revenue from foreign markets, and consider our international business to be the key growth engine for Malee Group moving forward," said Lopansari.
Earlier in July 2017, Malee Group also announced plan to spend Bt 1 billion (US$32.05 million) in 2018 to restructure the business to become a health-driven global F&B firm. The group also revealed plan to achieve sales of Bt 10 billion (US$320 million) in 2018.
Malee is also focusing on expanding its premium fruit juice category to reach Thai consumers in 2018. Malee Group started producing canned fruit and juice and eventually expanded to also produce cereal drinks and dairy products under the Chokchai Farm brand. The firm celebrates its 40th anniversary this year.