Asia > Eastern Asia > South Korea > HiteJinro to open beer plant in Vietnam

South Korea: HiteJinro to open beer plant in Vietnam


HiteJinro is looking to build a beer plant in either Vietnam or the Dominican Republic to seek additional resilient increase, a company executive said in a recent interview.

“If we decide to build a plant outside Korea, it will be in Vietnam. The Dominican Republic could be an extra option depending on request,” Lim Kyu-hun, director of HiteJinro’s overseas business chief office, told The Korea Times last week.

The liquor market in Vietnam has grown 10 % annually in recent years. And high productivity and low labor costs make the country additional attractive than advanced nations, Lim said.

“A plant in Vietnam could help meet a burgeoning request for beer not only in the Southeast Asian country but as well in other markets such as China, Taiwan and Hong Kong,” he said.

Building a plant in Latin America mostly depends on local request. If this reaches at least 50 million liters a year, it is worth having a factory in the Dominican Republic, he explained.

Early in April, HiteJinro signed a transaction to produce beer under the brand name “Barcelo” in an original development manufacturing transaction with Group Barcelo, a major company in the Dominican Republic.

Shipments from Korea began in January to the Central American country where the national-run Cerveceria Nacional Dominicana controls over 95 % of the local beer market.

From the Dominican Republic, HiteJinro plans to make inroads into neighboring nations in North America and South America. But he didn’t provide any timeframe or details.

In its expansion drive, HiteJinro aims to achieve $300 million in exports by 2017 from this year’s target of $155 million.

It is as well aiming to earn additional than 18 % of in general sales from overseas markets, double this year’s 9 % target, the director said.

HiteJinro’s outbound push was triggered by saturation in the domestic and advanced markets. No new markets means no increase for Korea’s second-biggest beer company by sales next Oriental Brewery.

“As Japan is a saturated market for HiteJinro, the company is planning to boost sales in China and forge a presence in Africa and Eastern Europe,” Lim said.

Globally, Japan is its biggest client, accounting for 67 % of HiteJinro’s soju and 70 % of its beer sales. But sales there are slowing, said the director.

“Request for less strong liquor is growing in China due to health concerns. In advanced nations, we are launching products such as soju-based cocktails and soju-based slushies to lure local customers who increasingly care about their health,” Lim said.

HiteJinro suffered a 24 % slump in net profit for 2013 at 79 billion won ($76 million) from 103.5 billion won a year before, according to the Financial Supervisory Service.

The brewery currently earns 91 % of its total sales at home — it does not have an overseas production facility. It currently produces 1.5 billion liters of beer a year and 800,000 liters of soju, the country’s traditional distilled liquor.

OB, which took a 60 % of the domestic beer market as of March 2013, has a production capacity of 1.6 billion in Korea. The remaining 40 % was claimed by HiteJinro, according to the companies. OB does not have a plant overseas, either.

“Acquiring a micro brewery is a possible option to expand into world markets,” Lim said. By Choi Kyong-ae The korea times

Related Articles
  • South Korea's headline inflation remained at a zero %

    2015/11/24 South Korea's headline inflation remained at a zero % for 11 straight months though the inflation advanced in October from the previous month, a government statement showed Tuesday. Consumer prices climbed 0.9 % in October from a year before, according to Statistics Korea. It remained in a zero-% range since December 2014 at the same time as it posted 0.8 %. Amid the prolongation of the low headline inflation, the central bank was estimate to cut its inflation target band of 2.5-3.5 % in December for its regular revision each three years. "We expect the Bank of Korea and the government to acknowledge to lower the inflation target from 3.0 % to 2.5 % in a mid-point basis," Kwon Young-Sun, a Hong-Kong based economist at Nomura International, said in a statement.
  • Increase among the 21 Asia-Pacific Economic Cooperation (APEC)

    2015/11/18 Increase among the 21 Asia-Pacific Economic Cooperation (APEC) economies softened to 3.1 % in the second quarter of 2015, down from 3.2 % in the initial quarter and 3.4 % a year ago, according to an APEC economic analysis released on Tuesday. The statement said the increase slowdown reflected the prolonged weakness in world economic activity as the modest recovery in advanced economies was matched by a general slowdown in emerging market economies. The moderation in GDP levels could be attributed to declining investments and lacklustre exports, according to the statement. "Economies across the Asia-Pacific continue to grow but find themselves in a holding pattern of lower increase in the absence of high trade volumes," said Alan Bollard, Executive Director of the APEC Secretariat.
  • Tens of thousands march in South Korea anti-government protest.

    2015/11/15 Police fired tear gas and water cannons Saturday as they clashed with anti-government demonstrators who marched through Seoul in what was believed to be the major turmoil in South Korea's capital in additional than seven years. About 80,000 people were expected to turn up for the downtown rallies that stretched into the evening, according to an official at the Seoul Metropolitan Police Agency, who didn't want to be named, citing office rules. The marches, organized by labor, civic and farmers' groups, brought together protesters with a diverse set of grievances against the government of conservative President Park Geun-hye, inclunding her business-friendly labor policies and a decision to require middle and high schools to use only national-issued history textbooks starting in 2017.
  • The Uzbekistan-Korea Tungsten joint venture will start the construction

    2015/10/26 The Uzbekistan-Korea Tungsten joint venture will start the construction of a tungsten mining and processing complex on the basis of the Sautbay field (Navoi region, the central part of Uzbekistan) in the second half 2016, one of the representatives of the Korean Shindong Resources Co., which is co-founder of the joint venture, said. He made the remarks during the international conference“Investment potential of hard minerals of Uzbekistan” held in Tashkent. The total preliminary cost of the tungsten mining and processing complex construction project is about $150 million. In August 2011, the Korean Shindong Resources Co Ltd and Uzbek National Geology Committee signed an agreement on establishing a joint venture called Uzbekistan-Korea Tungsten to develop the Sautbay tungsten deposit. The joint venture, in which the share of the Uzbek National Geology Committee is 49 %, and the share of Korean companies is 51 %, was established in 2013.
  • Turkmenistan, Korea exchange experience in water management

    2015/07/09 Turkmenistan and South Korea have exchanged data on their experiences in water management. The exchange was conducted as part of a forum on water management organized by Turkmen Water Resources Ministry and the Korean Embassy in Ashgabat, the Turkmen government reported on July 8. Korean companies gave presentations on their experiences in the creation of an advanced integrated system of water supply management, water purification and desalination, quality control, and the development of the Smart nuclear power plant.