Suntory Beverage to Pour Extra $88 Million in Vietnam to Boost Output

Tuan Minh

16:20 01/12/2016

BizLIVE - Japan’s Suntory Beverage & Food plans to spend around $87.8 million to expand its soft drink production in Vietnam.

Suntory Beverage to Pour Extra $88 Million in Vietnam to Boost Output

Aquafina, a purified bottled water product of PepsiCo. Photo: Zing

Tokyo-based Suntory Beverage & Food plans to pour an additional 10 billion yen ($87.8 million) to boost its soft drink production in Vietnam over the next five years, according to the Nikkei Asian Review.
Suntory entered the Vietnamese market in April 2013 by forming a joint venture with the U.S. beverage titan PepsiCo. Suntory acquired a 51% stake in PepsoCo’s Vietnam beverage business while PepsiCo will take the remaining 49%.
The Japanese company plans to install three to four new production lines at its five factories in Vietnam. Accordingly, its production capacity in the Southeast Asian country will grow 60% from the current level to 200 million cases a year.
With this upgrade, Suntory, which already has a strong sales channel in the south, aims to expand its distribution network to the northern and central regions of Vietnam
Vietnam's soft drink market amounts to 4.6 billion liters, according to Euromonitor. Moreover, average annual growth of Vietnam's soft drink market in the five years through 2015 was nearly 20%, far exceeding Japan's, which was close to zero.
Vietnam is a major moneymaker for Suntory as it made up 40% of the company’s Asian market.
The Vietnamese taxman imposed a fine worth 24.34 billion dong (nearly $1.1 million) on Ho Chi Minh City-based Suntory PepsiCo Vietnam for tax violations relating to a factory opened in the Mekong Delta city of Can Tho in 2008.
Earlier this month, the Ministry of Health fined the firm 25 million dong ($1,110) for a food safety infringement.