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UPDATE 1-Carlsberg secures Thailand comeback with Singha deal
September 28, 2012 / 11:56 AM / 5 years ago

UPDATE 1-Carlsberg secures Thailand comeback with Singha deal

* Carlsberg, Singha Corporation sign joint venture deal

* Says Singha to sell Carlsberg brands in Thailand

* Deal to accelerate Carlsberg’s growth in the country -CEO (Adds details, background, quotes, share price)

By Mette Fraende

COPENHAGEN, Sept 28 (Reuters) - Danish brewer Carlsberg signed a joint venture with Thailand’s Singha Corporation, its second attempt to establish a footprint in the country, as it shifts its focus from sluggish growth in Europe to fast-growing Asian markets.

The world’s fourth-largest brewer said, on Friday, Singha will sell Carlsberg’s international brands and launch Singha beer outside Thailand.

“This is a perfect co-operation which can really accelerate our growth in the Thai market,” Carlsberg’s Chief Executive Jorgen Buhl Rasmussen said, adding Carlsberg had no plans to buy the Singha Corporation group.

The deal comes on the same day the world’s third largest brewer Heineken NV won full control of Asia Pacific Breweries (APB), maker of Tiger beer, in a S$7.9 billion ($6.4 billion) deal which boosts its presence in southeast Asia.

“Carlsberg is visible in Thailand today, but is still at a small scale compared with a partner holding a 60 percent market share,” Rasmussen said.

The companies did not disclose financial details regarding the joint venture.

Like other big brewers, Carlsberg has been looking more to emerging markets as well as price increases to offset tough competition in its more mature markets such as Europe.

Its position in its former growth-driver Russia has been hampered by government tax measures and legislation designed to curb alcohol abuse.

Rasmussen said it was possible that Carlsberg would seek licences to start brewing Singha beer.

“Both elements of the deal are interesting,” said Alm Brand analyst Stig Nymann.

“This can make a comeback in Thailand possible for Carlsberg. Without the deal that would have a very heavy project,” Nymann said.

The joint venture is Carlsberg’s second attempt to establish itself in Thailand. A partnership with local brewer Chang in Asia ended in 2005 with legal disputes between the parties.

Carlsberg generates about 12 per cent of its profits and 18 per cent of group volume in Asia and is seeking to expand its presence in the region. The brewer has said it is looking actively for acquisitions.

Singha Corporation holds a market share in Thailand of over 65 pct.

Carlsberg shares traded flat at 1133 GMT against a 0.3 percent rise in the Copenhagen stock exchange benchmark index and a flat-trading STOXX Europe 600 food and beverage index. (Additional reporting by Teis Jensen and Kristian Mortensen; Editing by Mike Nesbit)

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