According to Forbes, the trend of consuming less alcoholic beverages is becoming more popular due to the awareness of health risks after the Covid-19 pandemic. In fact, GenZ is currently drinking about 20% less alcohol than Gen Y due to health concerns and changes in consumer behavior. In addition, changes in legislation to restrict harmful drinking behaviors contribute to the reduction in demand.
In the Vietnamese market, companies in this industry are also experiencing poor business results, such as Sabeco. In the newly released financial report for the fourth quarter of 2023, Saigon Beer-Alcohol-Beverage Corporation (Sabeco) stated that its net revenue reached 8,520 billion VND, a 15% decrease compared to the same period, especially net profit of 947 billion VND, a 9% decrease compared to the same period. This is the lowest quarterly profit of Sabeco in the past 2 years.
Sabeco is a famous beer company in Vietnam. Photo: Sabeco
For the whole year of 2023, Sabeco’s revenue and after-tax profit reached 30,706 and 4,255 billion VND, respectively, a decrease of 13% and 23%.
Sabeco is a company established in Vietnam since 1875. Sabeco is associated with two famous brands, Saigon Beer and Bia 33. With impressive business results and good growth potential, Sabeco is considered one of the leading beer companies in Vietnam (holding 40% market share in our country) and ASEAN. This is also what attracted a billionaire to invest billions of USD in Sabeco. Who is he?
A historic deal in Vietnam
Charoen Sirivadhanabhakdi is one of the richest people in Thailand. Photo: Facts
This billionaire is Charoen Sirivadhanabhakdi (born in 1944). He is considered one of the richest people in Thailand. According to Forbes as of February 18, 2024, Charoen Sirivadhanabhakdi’s total assets are $10.6 billion. This is a low level in the fluctuating assets of this businessman, because earlier, in early 2018, after acquiring Sabeco, his assets reached $20.1 billion. Despite being known as a big investor, willing to spend bath everywhere, Charoen Sirivadhanabhakdi rarely appears in the media.
In December 2017, Thai Beverage (also known as ThaiBev), a company owned by billionaire Charoen Sirivadhanabhakdi, through its subsidiary Vietnam Beverage, spent $4.8 billion to acquire 53.59% stake in Sabeco. The acquisition of Sabeco is considered a major milestone that helped ThaiBev become the largest beer producer in Southeast Asia in terms of production capacity.
After 1 year of completing the deal, in 2019, Sabeco achieved its peak business results with a revenue of nearly 38,000 billion VND and a net profit of 5,370 billion VND. In the 2 years of 2020 – 2021, Sabeco’s revenue decreased significantly to 27,961 and 26,374 billion VND. The reason is the serious impact from the Covid-19 pandemic and changes in consumer behavior in Vietnam since Decree 100/2019/NĐ-CP came into effect, which regulates administrative sanctions in the field of traffic.
ThaiBev, owned by Charoen Sirivadhanabhakdi, invested in Sabeco with a long-term vision.
In 2022, after the end of the pandemic, the demand for alcoholic beverages increased, helping Sabeco’s revenue to rebound to nearly 35,000 billion VND. But in 2023, the domestic economy was doubly affected by the post-Covid-19 and global economic recession, causing Sabeco’s business results to deteriorate once again.
However, from the beginning, ThaiBev, owned by the Thai billionaire, invested in Sabeco with a long-term vision and ambitions to dominate the Vietnamese beer market, thereby laying the foundation for the Southeast Asian region. Therefore, temporarily being in the loss is not a big issue for this billionaire.
According to Nikkei, at a press conference in Thailand in September 2022, leaders of ThaiBev shared that Sabeco is a “gem”, a rare asset among beer producers in Southeast Asia.
The resilience of the Thai billionaire
Before becoming a billionaire, an investor, a “tycoon” in many fields in Thailand and Southeast Asia, Charoen Sirivadhanabhakdi came from a poor background. Photo: Bloomberg
Billionaire Charoen Sirivadhanabhakdi was born into a Thai Chinese family, selling goods in the Chinatown area of Bangkok, Thailand. He is the 6th child in a family of 11 siblings. Due to difficult life, Charoen Sirivadhanabhakdi had to drop out of school at the age of 9 to work and help his family.
Going through difficult years during childhood became the motivation for Charoen Sirivadhanabhakdi to seek a way out of poverty and become a billionaire, a “tycoon” in many famous fields in Thailand. With experience as a supply agent for a liquor factory, Charoen started to obtain his own alcohol production license when the Thai Government allowed liberalization of the industry in the late 1970s and early 1980s.
Not only in the beverage industry, the “business empire” of Charoen Sirivadhanabhakdi also expanded and developed in many sectors. Among them, the three-legged stool was formed, including ThaiBev operating in the beverage industry, Berli Jucker (BJC) operating in multiple sectors, and TCC Land in the real estate sector. TCC Land helps this billionaire own large real estate assets in Thailand, the US, Australia, and many other countries around the world.
Currently, despite being in his 80s, Charoen Sirivadhanabhakdi still holds the position of Chairman of many large corporations.
References: Nikkei, Forbes, Sabeco
