Malee juices revenue with Vietnam deal
SET-listed Malee Group Plc, one of the country's top juice makers, has sealed its first acquisition deal with a Vietnamese drink producer as part of its ambitious strategic plan to become a health-driven global food and drink firm by 2021.
Chief operating officer Roongchat Boonyarat said the company spent 330 million baht to acquire a 65% stake in Long Quan Safe Food Joint Stock Company (LQSF) in Vietnam.
Malee is looking to expand in Vietnam and increase the company's manufacturing capability for exports to neighbouring countries and emerging markets.
The funds will come from the company's working capital and loans from banks. Malee expects to complete the transactions by the second quarter.
Opas Lopansri, senior vice-president for international business, said the acquisition will enhance the company's competitive advantage in serving the needs of middle- to lower-income consumers in Asean, particularly the Philippines and Indonesia.
Malee will export some drinks to sell via the LQSF network in Vietnam and some LQSF products from Vietnam will be sold in the mass fruit juice market in Thailand in the third quarter, he said.
LQSF produces coffee, mixed fruit juice, green tea, drinking water, jellies and carbonated soft drinks, with a wide range of packaging formats such as cans, glass bottles and plastic bottles and cups. The company has production capacity of 300 million litres per year.
"This acquisition is part of Malee's strategic move to tap into overseas markets, helping to pave the way to achieve our mission of becoming a health-driven global F&B firm by 2021," said Mr Opas.
He said LQSF's good reputation and credibility, which it has built up among Vietnamese consumers after 25 years of operations, was one reason for the purchase.
The acquisition will increase Malee's total production capacity to 630 million litres per year.
"We are confident this acquisition will greatly benefit our international business. LQSF will be a manufacturing hub to serve mass market consumers in Vietnam, Thailand, the Philippines, Indonesia, and other key markets in Asean," said Mr Opas.
He said the acquisition will drive the proportion of the company's foreign revenue to 45-46% of the total this year and 60% over the next three years -- up from 40% at present.
Malee's revenue totalled 8 billion baht in 2017, up from 6.58 billion in 2016.
The company expects its revenue to rise by 30% this year to 10 billion baht.
Malee Group began making canned fruit and fruit juice in Thailand 40 years ago and has gradually expanded into cereal drinks and dairy products under the Chokchai Farm brand.
Some 60% of Malee's revenue stems from the domestic market, with the rest coming from over 30 countries including Cambodia, Laos, Myanmar, Vietnam, the Philippines and the US.
Sales include drinks bearing Malee's own brand, as well as labels under original equipment manufacturer contracts.
Malee Group started investing abroad by forming a joint venture with Monde Nissin Corporation in the Philippines in 2015 to set up Monde Malee Beverage Corporation.
In 2017 the company joined hands with PT Kino Indonesia, a producer of drinks and personal care products, to set up PT Kino Malee, with operations expected to begin this year.
MALEE shares closed yesterday on the SET at 36.75 baht, down 25 satang, in trade worth 76.1 million baht.