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ThaiBev IR Presentation - SIAS · April 1986 Spirits business was merged with Sura Maharasadorn...
Transcript of ThaiBev IR Presentation - SIAS · April 1986 Spirits business was merged with Sura Maharasadorn...
February 2008
Thai Beverage PlcThai Beverage PlcInvestor Presentation
Aug 2010
By By
Investor Relations Investor Relations DepartmentDepartment
SIAS Corporate Profile Seminar, SIAS Corporate Profile Seminar, 4 4 September September 20102010, Singapore, Singapore
By By
Investor Relations Investor Relations DepartmentDepartment
SIAS Corporate Profile Seminar, SIAS Corporate Profile Seminar, 4 4 September September 20102010, Singapore, Singapore
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The following presentation may contain forward looking statements by themanagement of Thai Beverage Public Company Limited (“ThaiBev"), relating to financial
or other trends for future periods, compared to the results for previous periods.
Some of the statements contained in this presentation that are not historical factsare statements of future expectations with respect to the financial conditions, results of
operations and businesses, and related plans and objectives. Forward lookinginformation is based on management's current views and assumptions including, but notlimited to, prevailing economic and market conditions. These statements involve known
and unknown risks and uncertainties that could cause actual results, performance orevents to differ materially from those in the statements as originally made. Suchstatements are not, and should not be construed as a representation as to futureperformance of ThaiBev. In particular, such targets should not be regarded as a forecast
or projection of future performance of ThaiBev. It should be noted that the actualperformance of ThaiBev may vary significantly from such targets.
Note on Forward Looking Statements
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Thai Beverage Plc.
Beers Non-alcoholic beverages
Thai & Asian Spirits
Water & Soda
Energy Drinks
Fruit Juices
Scotch whisky & International
Spirits
RTD Coffee
RTD Green Tea
Spirits
Product Portfolio
Food & Restaurants
Sports Drinks
Japanese Buffet Chains and Fast-Food Kiosks
Lager Japanese Chilled and Frozen Food
Total of 100 companies including production,
marketing and sales
Functional Drink
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Company Overview
Source: IPO Prospectus, ThaiBev’s SGX Announcements
October 1977 Acquisition of Sangsom Co.,Ltd. to produce Sangsom rum
May 1983 Successfully bid for concessions offered by the Government to build and operate 12 distilleries in Thailand
April 1986 Spirits business was merged with Sura Maharasadorn Group
July 1988 Acquisition of Red Bull Distillery (1988) Co.,Ltd.
May 1994 Bang Ban brewery commenced operations
March 1995 Joint Venture between Carlsberg A/S and Chang Beer was launched in Thailand
July 1998 Acquisition of United Winery and Dist illery Co.,Ltd
December 1998 Chang Beer became a market leader with approximately 54% market share of beer produced in Thailand
July 1999 Acquisition of Bang Ban brewery from joint venture with Carlsberg A/S
January 2000 Acquisition of 12 dist illeries from the Government
October 2001 Kampaengphet brewery commenced operations
August 2002 Acquisition of Thai Alcohol Public Company Limited
October 2003 Thai Beverage was established as a holding company for all the subsidiaries
June 2004 Expansion of Kamphaengphet brewery commenced
May 2006 Thai Beverage successfully listed in the SGX-ST
October 2006 Acquisition of distillery assets from Sin Surang Karn Sura Co.,Ltd.
October 2006 Acquisition of PSUK, acquisition of BSHK
September 2007 Acquisition of United Products Company Limited and SPM Foods and Beverages Company Limited
January 2008 Acquisition of energy drink and ready-to-drink coffee assets from Wrangyer Beverage Company Limited
Sep-Nov 2008 Acquisition of 43.9% of Oishi in Sept; 89.9% following a tender offer in Nov, for a total cost of 6.24 billion Baht
Nov 2009 Acquisition of Yunnan Yulinquan Liquor in China
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ThaiBev Today
� Thailand’s biggest alcohol beverage producers
� Three breweries, 18 distilleries in Thailand, 6 distilleries overseas, and 4 manufacturing facilities for non-alcohol beverages
� Largest market share in spirits and green tea
� Free cash flow(‘09)* 15,327 M Baht
Source: ThaiBev’s Consolidated Financial Statements 2009 (Thai GAAP)
Performance 2009 Data
Sales 107,969 M Baht
Net Profit 10,566 M Baht
Sales Volume
Beer 571 M Litres
Spirits 487 M Litres
Sales 2009 Net Profit 2009
* Free Cash Flow = Net Cash Provided by Operating Activities - CAPEX
-15.3%
109.3%
4.6% 1.4%
Beer Spirits Non-Al Beverages Food
28.0%
64.6%
4.5% 3.1%
-0.2%
Beer Spirits Non-Al
Beverages
Food Elimination
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Experienced team
Mr. Thapana Sirivadhanabhakdi - President and Chief Executive Office International Businesses and Marketing
- EVP from 2003 - January 2008
- Several executive positions in Red Bull Distillery (1998), BJC, Beer Thai, Dhospaak, Oishi, Univentures Plc., Siam Food Products Plc.
- Director of several subsidiaries.
Ms. Kanoknart Rangsithienchai – 5th Executive Vice Chairman
- Former Executive Vice President of Sangsom Group, 2000-2003, and Vice President of the Office of Controller, Surathip Group 1983-1999. Bachelor of Accounting.
Mr. Sithichai Chaikriangkrai - Director and Executive Vice President Finance
- Over 23 years’ finance and accounting experience including Asia Voyages & Pansea Hotel; Goodyear ( Thailand); Coopers & Lybrand.
Mr. Ueychai Tantha-Obhas - Director and Executive Vice President Sales Planning and Support
- Former Chief Executive Officer and the Managing Director of Riche Monde (Bangkok) Ltd.
- Former Managing Director of Sarin Property Co., Ltd.,
- Former Group Product Manager of Colgate Palmolive Co., Ltd.
Dr. Pisanu Vichiensanth - Director and Senior Vice President Beer Production
- Former Assistant Plant Executive, Carlsberg Brewery (Thailand); - Head of Food Science and Technology at Thammasat - University;Head of Food Technology at Khon Kaen University;
- Lecturer in food technology at Khon Kaen University.
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Experienced team (cont.)
Mr. Chukiet Tangpongprush – 6th
- Head of the General Affairs Department of Sura Maharas Plc.
- Head of the Human Administration and General Affairs, Sura Bangyikhan Company.
Mr. Sawat Sopa - Executive Vice President Spirit Production
- Former Managing Director of Beer Thai (1991) Co Ltd - Executive Vice Chairman of Red Bull Distillery (1988) Co Ltd.
- Former Executive Director of the 43 Group of companies - Former Chief Engineer of Siam Chem Co. , Ltd
- Former Engineer, Bangchak Oil Refinery.
Mr. Somchai Suthikulpanich - Senior Vice President Non-Alcohol Production
- Appointed the SVP ThaiBev and EVP of Thai Beverage Marketing in 2008
Mr. Jean Lebreton - Senior Vice President Strategy
- Former partner of Boston Consulting Group (BCG)
- 16 years of experience in consulting in Europe and Asia
- Experience in sectors such as consumer goods, banking and energy
Mr. Vichai Chaiyavaranurak - Senior Vice President Business Development
- Appointed the SVP of Thai Beverage in 2008
- He is also an executive director and director of some of ThaiBev’s subsidiaries
Mr. Matthew Kichodhan - Senior Vice President International Business
- Chief Operating Officer, Minor Corp. Pcl (2006-2009)
- Vice President, Business Management, Gillette Asia Pacific Group, Singapore (2004-2006)
- Regional Marketing Director, Asia Pacific, PepsiCo Inc. (1995-2004)
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Social Contributions and Sponsorship
� Help in Health care needs of general public
� Help preserve heritage of Thai arts & cultures
� Various donations & social contribution projects i.e. ThaiBev Blanket Donation program
� Contribution to the improvement of Thai sport competitiveness
� Sponsor Everton Football Club in the UK
� Send talented players to train as part of Chang Beer’s sponsorship of the Everton FC
� Support cultivation of sugarcane, cassava, rice
� Biogas projects at breweries and distilleries
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Our Vision & Mission
Vision:
To become a leading global beverage company focusing on commercial excellence, continued premiumisation of our products, and professionalism.
Mission:
To seek “partnerships” among our key stakeholders through six guiding values:
• offer quality products for every customers segment
• satisfy distributors’ needs by offering professional services
• provide first-quartile returns to our shareholders with consistently high revenue growth and profitability
• become a role model for professionalism, transparency, and good corporate
governance
• trust, empowerment, and reward our staff to make them accountable, and
• contribution to local communities
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Key Strengths
� Largest Alcobev Player in Thailand
� State-of-the-art production facilities
� Strong brand recognition and a very diversified product portfolio
� Extensive distribution network and logistics
� Strong balance sheets
� Experienced and Proven Management Team
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Company Strategies
Leverage infrastructure & distribution network
Develop the international business
Expand in new profitable segments
Reshape HR management systems
The company plans to move steadily upmarket to encroach in segments traditionally dominated by foreign imports.
The company has also diversified into non-alcoholic drinks to seek further growth and mitigate risks in the alcoholic beverage market.
While doing this, the Company will maintain its current market leadership and continue brand investment.
The key to ThaiBev’s success domestically remains with its infrastructure and distribution network. By diversifying and increasing its portfolio, the
company will face very low incremental cost of distribution.
The company’s strategy of developing the international business will offer the potential for more rapid growth.
The company has reshaped its HR management system to increase staff competency.
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� Blend 285 (launched in 2006)
Blended spirit, 35% ABV
� Federbräu (launched in April 2008)
Premium Lager beer, 4.7% ABV brewed under Reinheitsgebot,The German Purity Law 1516
� Drummer (launched in 2008)
5 year Scotch whisky, 40% ABV
� Meridian (launched in 2009)
V.S.O.P brandy, 38% ABV
Premiumize our product offer
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Refreshing Brands
� Sangsom(Brown Spirits)
� Hong Thong(Brown Spirits)
� Mekhong
(Brown Spirits)
� Chang Beer(Lager)
Repackaged, Revamped and Relaunched in April 2006
Introduced in gift boxes in 2007
Repackaged, Repositioning and Relaunched in 2009 in Thailand after successful leads in
international markets
Repackaged, Clearer positioning, and Relaunched in Q409
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Expand into profitable new segments
Acquisition of Wrangyer & Black Up
� On 28 Jan 08, ThaiBev acquired all the energy drink and ready-to-drink coffee assets from Wrangyer Beverage Ltd. at 420 million baht
Acquisition of Oishi Group
� Acquired 43.9% on 30 Sept 2008; 89.9% following a tender offer 14 Nov 2008, for a total cost of 6.24 billion Baht
� Production capacity of soft drinks 324 million liters
� 128 restaurants and kiosks at 69 locations (Dec 09)
Water
� Total production capacity of 450 million liters
� In October 2007, ThaiBev approved the investment of 194 million Baht to increase production of PET drinking water bottle from 7 million liters per year to 700 million liter per year
� Began home delivery service for both water and club soda in 2009
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International business
International Beverage Holding Limited is the international arm of ThaiBev
� Headquarters in Hong Kong
� Global operations managed by offices in Hong Kong, Singapore, USA, UK and China
� Inver House Group in Scotland
Thai products - Focus on key Thai brands with potential to become “Global Thai Brand”
� Mekhong has been revamped and sold through high-end restaurants and cocktail bars in Europe and North America
� Chang Beer has been repackaged and recently launched in the major Western markets as premium imported beer
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Distribution Network
93 branch offices
Hypermarts, Supermarkets,
Convenience Stores, Hotels, Golf courses
Modern trade/ Hospitality Team
ThaiBev
International
Modern trade, Thai & Fusion
restaurants, bars, pubs
>80 countries
400,000 Retail shops/ Restaurants
4,500 Sub Agents
~1,050 Direct Sales Employee
930 Agents
680 Direct Sub Agents
� 93 sales offices covering every province of Thailand
� Apart from selling directly to retail shops and restaurants, ThaiBev’s direct sales team also fosters good relationship
with retailers and shops as well as recommend and assist them in product display arrangement and pricing
� Extensive distribution network to approx. 400,000 points of sales enabling us to deliver newer products faster to
market
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0
20
40
60
80
100
120
1/4/2010 1/22/2010 2/11/2010 3/5/2010 3/25/2010
million
Volume (3 months)
Share Data
Source: www.shareinvestor.com
Stock PerformanceStock Information
IPO Data
(billions of shares)
New shares issued 2.444 10%
Total shares offered 4.889 20%
Shares for institutions 4.645 19%
Shares for Sing retail 0.244 1%
Shares for over allotment (new share) 0.665 3%
Shares
Share Data
*Exchange rate 1SGD = 0.73 USD, 1SGD = 23.83 Baht
Shares outstanding 25,110 m
Free float % (approx.) 22.26%
Based on Annual Report 2009
Major shareholders
Sirivadhanabhakdi family 66.58%
Others 11.16%
Market cap (Billion)
(S$0.285, as of 30/4/10)
S$ 7.2
US$ 5.3*
THB 170.5*
0.100.120.140.160.180.200.220.240.260.280.30
1/4/2010 1/18/2010 2/1/2010 2/17/2010 3/3/2010 3/17/2010
S$
3-Month Price Performance
ThaiBev Close STI Rebased SET Rebased
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Dividend Policy: not less than 50% of net profit after deducting all appropriated reserves and investments
Dividend
Source: ThaiBev’s Financial Statement
Dividend Payment 2008 2009
Net Profit belonging to the Company (M Baht) 10,342 10,566
Number of Shares (M) 25,110 25,110
Dividend (M Baht) 7,533 8,286
Less Interm dividend already paid (M Baht) 3,013 3,767
Final dividend (M Baht) 4,520 4,520
Portion of Net Profit 73% 78%
Total Dividend per share (Baht) 0.30 0.33
Less Interm dividend already paid (Baht) 0.12 0.15
Final dividend (Baht) 0.18 0.18
THB: SGD 1* 23.79 23.82
Total Dividend per share (SGD) 0.013 0.014
Share close** (SGD) 0.24 0.22
Dividend Yield 5.3% 6.4%
* Annual Selling Rate from Bank of Thailand
** Average closing price from Jan - Dec'08, for year 2008
** Average closing price from Jan - Dec'09, for year 2009
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Excise Taxes Structure
For alcohol industry, excise tax levy is based on the higher of the two rates - Ad Valorem vs. Specific. For example, a 640ml Chang beer with 6.4% ABV when applied Specific Rate calculation (Bt*Liter of pure alcohol* volume – 100x 6.4%x.640) is Bt4.10 vs. Ad Valorem of Bt18.97 appeared above. Thus, Ad Valorem rate is levied plus additional taxes such as Municipal, health, and TPBS.
Beer Ad Valorem Rate
% of Ex-factory Price
(640 ml. bottle of beer)
Excise Tax 0.6 x 31.61 = 18.97
Municipal Tax 10% 0.1 x 18.97 = 1.9
Health Fund 2% 0.02 x 18.97 = 0.38
TPBS Tax 1.5% 0.015 x 18.97 = 0.28
Total Tax (baht) 18.97 + 1.9 + 0.38 + 0.28 = 21.53
Sample Tax Calculation
White Spirits Specific Rate
Rate x % of Alcohol x Volume
(White Spirits)
Excise Tax 120 x 0.4 x 0.625 = 30
Municipal Tax 10% 0.1 x 30 = 3
Health Fund 2% 0.02 x 30= 0.6
TPBS Tax 1.5% 0.015 x 30 = 0.45
Total Tax (baht) 30 + 3 + 0.6+ 0.45 = 34.05
Excise TaxesProduct Ad Valorem Rate Specific Rate
(Ex-factory) Bt/ Liter of pure alcohol
Fermented Liquor: Ceiling Rate 60% Ceiling Rate 100
• Beer 60% 100
• Wine & Sparkling wine from grapes 60% 100
• Local fermented liquor 25% 70
• Other 25% 70
Distilled Liquor Ceiling Rate 50% Ceiling Rate 400
• White spirits 50% 120
• Compounded spirits
(Hong Thong, Mungkorn Thong, Chinese Herb)
50% 300
• Special blended spirits (Mekhong) 50% 400
• Special spirits
Brandy 48% 400
Whisky 50% 400
Other (Sangsom, Crown99, Blue) 50% 400
• Absolute alcohol:
Used in industry 2% 1/ liter
Used in medicine, pharmaceuticals, science 0.10% 0.05/ liter
Other 10% 6
+ Municipal Taxes: 10% of Excise + Health Promotion Fund Contribution: 2% of Excise
+ Thai Public Broadcasting Service Fund Contribution: 1.5% of Excise *
* TPBS Funds Applied from 14 Jan 2008
Source: IPO Prospectus, Ministry of Finance Announcement no. 78/2550
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The Thai Economy
� Population 67.0 Million (Dec’09)
� GDP growth 5.8% (Q4’10)
� Core Inflation 0.6% (Jan’10)
� Exchange Rate 33.04 Baht/US$ (Jan’10)
� Minimum wage 151-206 baht/day (announced on 24 December 2009)
Source: Bank of Thailand, Office of the National Economic and Social Development Board, Ministry of Labour
Economic Conditions Jan’10By Bank of Thailand
– The economic conditions in January 2010 continued to expand, and its expansion remained broad-based. External demand and tourism were the main factors contributing to an economic expansion.
– Private consumption grew satisfactorily due to continued expansions in farm income and employment.
– Manufacturing production slightly decelerated due to oil refinery’s annual maintenance shutdown and inventory build-up in the previous month in some industries.
– External stability remained sound as reflected in high level of international reserves and low level of external debts, while internal stability showed signs of tightened labor market in some industries and rising inflation rate.
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Key Demand Drivers/Trends
� Growing preference for brown spirits and beer
� Growing recognition and
acceptance of Western brands among local consumers
� Aspiration to perceived higher quality
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Launching ThaiBev’s First Brandy
� Debut of ThaiBev’s new brandy under the brand of “Meridian”
� Meridian:
� V.S.O.P (Very Special Old Pale) brandy distilled from fermented
grapes and other fruits, and aged in wooden casks for four years
� 38% ABV
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* The price shown above is for full bottle. The volume for white spirits full bottle is 625 ml
* The volume for brown spirits full bottle is 700 ml, except Mungkorn Thong, Mekhong which is 750 ml
Blue
Admix whisky
Crown 99Sangsom
Mungkorn
Thong Mekhong Hong Thong
� Bt 165-180
Blend 285
Brown Spirits
Pai-Thong Chiang-Chun Sua Dum
White Spirits
Chinese Herb Spirits
Bt 55 – 85/ 625 ml
� Bt 205-215� Bt 195-200� Bt 138-150� Bt 130-140 � ~Bt 189-199
Drummer
Blended Scotch Whisky
Admix Whisky
Choices at several price points but still room to grow upwards
White Tiger White Bear Niyomthai Ruang Khao
ThaiBev’s Spirits Portfolio
� Bt 420� Bt 260
Meridian
Brandy
� Bt 450
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ThaiBev’s Spirits Portfolio (Inver House)
Single Malt Scotch Whisky
Speyburn
Blended Scotch Whisky
Green PlaidPinwinnieHankey BannisterCatto’sMacArthur’s
Heather Cream Golden
IceCold
Stream
Kulov
Blairmhor
Liqueurs Vodka & Gin
Old Pulteney Liqueurs
Old Pulteney
� £24.49- £ 71.49
AnCnoc
� £24.99- £ 97.49
Balblair
� £29.99- £ 149.99 � £22.49- £ 71.49
BarrogillHankey
Bannister
� £21.29� £12.49
Blended Malt Scotch Whisky
� £9.49 � £9.99� £14.99
Caorunn
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Spirits Brands 2005 Share (by volume)Premium imported spirits Scotch whisky Local brown spirits, admixes Local white spiritsBrands Producer % Share Brands Producer % Share Brands Producer % Share Brands Producer % Share
JW Black Diageo 24% 100 Pipers Pernod Ricard 77% Sangsom Thaibev 48% Ruang Khao Thaibev 74%Chivas Regal Pernod Ricard 9% JW Red Diageo 5% Mungkorn Thong Thaibev 15% Pai Thong Thaibev 5%
Other 67% Spey Royal Diageo 6% Mekhong Thaibev 8% Chinese Herbal Thaibev 2%Other 12% Crown 99 Thaibev 3% Community Producers 18%
Master Blend Pernod Ricard 5%Singha Haraj The United Products 2%
Other 20%
838 3,490 18,211 Sector Volume ('000 9 Litre Cases) 51,0001% 5% 25% Sector Volume as % of total market 69%
Market Share 2005
ThaiBev 74%
Others 21%
Pernod Ricard 5%
Source: Canadean, The Spirits Service Annual Report - 2006 Cycle, Thailand
Spirits: Thai Market ’05
Top 10 Brands in Thailand
ThaiBev’s products are highlighted in green
Volume: ‘000 Litres
Source: Canadean, The Spirits Service Annual Report - 2006 Cycle, Thailand
Volume '000 9 Litre Cases % Share
2004 2005 2004 2005
Total Spirits 72,205 73,541 100% 100%
Ruang Khao 38,045 37,705 53% 51%
Sang Som 7,705 8,675 11% 12%
Pai Thong 2,970 2,765 4% 4%
100 Pipers 2,550 2,700 4% 4%
Mungkorn Thong 1,280 1,880 2% 3%
Mae Khong 1,800 1,495 2% 2%
Chinese Herbal Spirits 1,260 1,210 2% 2%
Master Blend 1,525 825 2% 1%
Crown 99 542 601 1% 1%
Singharaj 325 300 0% 0%
Top 10 80% 79%
ThaiBev in Top 10 74% 74%
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Total spirits sales volume
430 455
485 476 446 437
487
2003 2004 2005 2006 2007 2008 2009
Spirits Total Sales Volumes (M liters)
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Spirits Financial Results
* EBIT = Earning before Interest Expense and Tax
* EBITDA = Earning before Interest Expense, Tax, Depreciation and Amortization
Spirits ResultsSource: Company’s Consolidated Financial Statements (Thai GAAP)
(in million Baht) 2008 2009Revenue from Spirits sales 59,781 69,733
Interest income 40 5
Other income 143 183
Total Spirits Revenues 59,964 69,921
Cost of sales 39,191 45,540
Selling and administrative expenses 6,893 7,611
EBIT 13,880 16,770
EBITDA 16,215 19,023
Interest expense 400 301
Income tax expense 3,821 4,833
Net profit 9,659 11,636
CoS as % of rev 66% 65%
S&A as % of rev 12% 11%
Gross profit margin 34% 35%
EBIT Margin 23% 24%
EBITDA Margin 27% 27%
Net profit margin 16% 17%
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Spirits Cost Structure: FY09
(% of total revenue)
� Low depreciation from old distilleries
� Main raw material: molasses source domestically
� Molasses tanks were built to mitigate the risk of shortage
16.6%
7.3%10.9%
48.6%
5.6% 6.7%1.6% 1.1% 1.6%
Net profit Int. exp.+ Inc.
Tax
SG&A Excise Tax Packaging Raw Material Depreciation Labor Other
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Key Demand Drivers/Trends
� Increasing health awareness presents prospect for broader low
calorie - light beer segment
� Growing number of brands for the first time in Thailand’s history
� Movement away from white spirits toward aspirational drinks like brown spirits and beer presents growth opportunity
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Chang Beer New Look
� On 30 Sep, 2009, ThaiBev introducednew look of Chang Beer, each with aclear product positioning to attractconsumers of different lifestyles.
− Chang Classic: for drinkers with astrong and unmistakablepersonality
− Chang Draught: for smooth, suavebeer lovers
− Chang Light: for cool and trendy
revelers
� The three products will all be promotedunder one same umbrella marketingcampaign of “Unified Thai-ness”
� After this campaign, we expect thereinvented Beer Chang products to eachhave a clear positioning character and tobe able to attract more consumers.
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ThaiBev’s Beers
Domestic BeerArcha Chang Chang Draught Chang Light Federbräu
Alcohol Content 5.4% 6.4% 5.0% 4.2% 4.7%
Positioning Light Economy Economy Light Economy Standard Premium
Price/ Bottle Bt 37-39 / 640ml Bt 38-42 / 640ml Bt 38-42 / 640ml Bt 38-42 / 640ml Bt 63-65 / 640ml
Key Competitors Leo Leo Leo / Singha Singha/Singha Light Heineken, Asahi
Export BeerChang Export
Alcohol Content 5.0%*
Positioning Premium Export Beer
Price / Bottle $4
Key Competitors Singha Export
*With exception of Cambodia sold with alcohol content of 6.4%
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-
500
1,000
1,500
2,000
2,500
2001 2002 2003 2004 2005 2006 2007
M Liters
Economy Standard Premium
Beer: Thai Market’07
� ThaiBev holds a majority share of 54.6% of economy segment
Beer Segmentation
Beer Brands by Segmentation
Source: Canadean, The Beer Service Annual Report - 2008 Cycle, Thailand
Premium Standard Economy Brands Producer % Share Brands Producer % Share Brands Producer % Share
Heineken Thai Asia Pacific 89.4% Singha Boonrawd 94.6% Chang ThaiBev 37.1%
Asahi Boonrawd 3.1% Tiger Thai Asia Pacific 4.2% Archa ThaiBev 16.7%
Kloster Boonrawd 2.1% Chang Light ThaiBev 1.1% Chang Draft ThaiBev 0.8%
San Mig Light San Miguel 2.0% Blue Ice San Miguel 0.1% Leo Boonrawd 44.6%
San Mig Pilsen San Miguel 2.0% Singha Light Boonrawd 0.2%
Guinness Guinness 0.0% Esarn Beer Boonrawd 0.2%
Others 1.4% Thai Beer Boonrawd 0.0%
Cheers Thai Asia Pacific 0.4%
Red Horse San Miguel 0.1%
Sector Volume ('000 HL) 1,008 2,033 17,751
Sector Volume as % of total market 5% 10% 85%
36
31.6%
14.2%
0.7% 0.1%
Chang Archa Chang Draft Chang Light
Total Beer Market Shares: 2007
Boonrawd
ThaiBev
TAPB
Total Thai Beer Market ’07 = 2,079 M Litres
996 M Litres
105 M Litres
971 M Litres
47%
Source: Canadean, The Beer Service Annual Report - 2008 Cycle, Thailand
9.4%
38.1%
0.1% 0.3%
Singha Leo Asahi Others
48%
4.3%
0.4% 0.3%
Heineken Tiger Cheers
5%
% market share of each brand
37
Beer Volume
1,041
944
824
923 957
773
571
2003 2004 2005 2006 2007 2008 2009
Beer Total Sales Volume (M Liters)
38
Beer Financial Results
* EBIT = Earning before Interest Expense and Tax
* EBITDA = Earning before Interest Expense, Tax, Depreciation and Amortization
Beer ResultsSource: Company’s Consolidated Financial Statements (Thai GAAP)
(in million Baht) 2008 2009Revenue from sales 38,458 30,196
Interest income 12 4
Other income 61 323
Total Beer revenues 38,531 30,523
Cost of sales 31,143 25,930
Selling and administrative expenses 6,475 6,587
EBIT 913 (1,994)
EBITDA 2,923 (403)
Interest expense 226 206
Income tax expense 349 (568)
Net profit 338 (1,632)
CoS as % of sales rev 81% 86%
S&A as % of sales rev 17% 22%
Gross profit margin 19% 14%
EBIT Margin 2% -7%
EBITDA Margin 8% -1%
Net profit margin 1% -5%
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Beer Cost Structure: FY09
(% of total revenue)
Beer Raw Materials
� Maltsourced from America, Europe and Australia four year long term agreement
� Broken ricesourced domestically
-5.3%-1.2%
21.6%
56.6%
13.8%7.2%
2.4% 1.1% 3.8%
Net profit Int. exp.+ Inc.
Tax
SG&A Excise Tax Packaging Raw Material Depreciation Labor Other
� Hopssourced from America, Germany, Australiafour year contract
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Launching ThaiBev’s First Sports Drink
� Debut of new sports drink electrolytes,
“Power Plus”
� Power Plus:
� 3 flavours: blue cider, fruit blast, orange fusion
� Target: athletes & active sport individuals
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ThaiBev’s Non-Alcoholic Drinks
Drinking Water Soda Water Black Up CoffeeWrangyer(Energy Drink)
OISHI Green Tea
Amino Plus Coffio
Oishi Products
� Bt 7-10 (500 ml, 600 ml) � Bt 6 (400 ml) � Bt 10 (150 ml) � Bt 12 (180 ml)
� Bt 20 (500 ml) � Bt 15 (350 ml) � Bt 10 (250 ml) � Bt 35 (1000 ml)
� Bt 20 (470 ml) � Bt 20 (230 ml)
Power Plus
� Bt 10 (250 ml)� Bt 15 (325 ml)
Amino Plus Shot
� Bt 30 (90 ml)
Matcha Mineral
� Bt 30 (470 ml)
Matcha Milk
� Bt 20 (230 ml)
43
Non-alcohol Beverages Financial Results
Non-alcoholic Beverages ResultsSource: Company’s Consolidated Financial Statements (Thai GAAP)
(in million Baht) 2008 2009Revenue from sales 3,953 4,916
Interest income 3 2
Other income 14 30
Total revenues 3,970 4,948
Cost of sales 2,938 3,130
Selling and administrative expenses 838 1,210
EBIT 194 608
EBITDA 599 965
Interest expense 66 32
Income tax expense (36) 88
Net profit 164 488
CoS as % of rev 74% 64%
S&A as % of rev 21% 25%
Gross profit margin 26% 36%
EBIT Margin 5% 12%
EBITDA Margin 15% 20%
Net profit margin 4% 10%
* EBIT = Earning before Interest Expense and Tax
* EBITDA = Earning before Interest Expense, Tax, Depreciation and Amortization
44
Water and Soda
� Chang Water and Soda are produced at three breweries in Ayutthaya (2), Kamphaengphet
Energy drink, Ready-to-drink coffee
� On 28 Jan 08, ThaiBev acquired energy drink and ready-to-drink coffee assets at 420 million baht
Energy drink: Wrangyer
Market size (approx.) 16,000 – 17,000 M Bt
2006 Market share 4-5%
Production capacity 2.64 million case/ year
Plant location Nakhon Pathom
Ready-to-drink coffee: Black Up
Market size (approx.) 8,500 M Bt
2006 Market share 4%
Production capacity outsource
Non-alcohol Beverages
45
Non-alcohol Beverages
Oishi
ThaiBev acquired 43.9% of Oishi’s shares from Yodkij Co. Ltd. on September 30, 2008; 89.9% following a tender offer 14 Nov 2008, for a total cost of 6.24 billion Baht. Oishi’s businesses are beverage and food.
Oishi Beverages:
Green tea (71% market share), Amino OK (functional drink) and Seiki (Fruit drink)
– Oishi got high Japanese image which is reinforced by its restaurant business. Several competitors have tried to do this but to no avail.
– During 2006-2007 several minor green tea brands have quitted the market due to the market downturn.
– Oishi not only focus its promotion with consumers but also trades and retailers to ensure maximum support and distribution.
For more information on Oishi group, please go to www.oishigroup.com
48
Food Results
Food ResultsSource: Company’s Consolidated Financial Statements (Thai GAAP)
(in million Baht) 2008 2009Revenue from sales 2,636 3,298
Interest income 12 5
Other income 12 14
Total revenues 2,660 3,317
Cost of sales 1,540 2,054
Selling and administrative expenses 968 1,093
EBIT 152 170
EBITDA 282 325
Interest expense 10 10
Income tax expense 6 9
Net profit 136 151
CoS as % of rev 58% 62%
S&A as % of rev 37% 33%
Gross profit margin 42% 38%
EBIT Margin 6% 5%
EBITDA Margin 11% 10%
Net profit margin 5% 5%
* EBIT = Earning before Interest Expense and Tax
* EBITDA = Earning before Interest Expense, Tax, Depreciation and Amortization
49
Food
Oishi Food Business:
Japanese buffet, A la carte food outlets and bakery
– Business format of Oishi restaurant is mainly different from others because few companies offer Japanese buffet format.
– Estimate number of Japanese restaurants in 2008 = 880
– Major promotion activities are TVC, credit card campaign, rotation of menu, gift-with-purchase, membership and lucky draw.
– 133 restaurants and kiosks at 72 locations (May 10)
For more information on Oishi group, please go to www.oishigroup.com
51
International Market
• US– Products: Chang Beer, Mekhong – Target:
Phase 1 Asian restaurants (Thai, SE Asian, Fusion). Phase 2 move to pubs, bars (mainstream)
• UK– Sponsor Everton Football Club to promote Chang Beer
– Target: Thai restaurants, pubs, bars/cocktail bars, and Goodison Park
– Move on to: Modern trade ex. Tesco Lotus
• Hong Kong– Center for Asian market– Gateway to Chinese market
• Australia– Woolworth distributes nationwide through over 3,000 outlets
52
Progress in Overseas Business
• USA
– USA performance was driven by Chang Beer sales increasing by 40% when compared to 2008 as per our goal despite the total Import Beer category declining by 9.2%
– Stronger than expected sales of Inver House Scotch whisky products in the USA. InterBevUSA now has regulatory approval to sell Inver House Malts in almost all states in the US.
• UK & North Asia (including Hong Kong)
– Sales continued to grow at moderate rate, with the UK being impacted by competitive price promotions during the peak holiday period in the fourth quarter.
– Inver House completed the installation of its new bottling line, and its new semi automated dumping, and filling facilities with great success, and this has allowed the operations to run more efficiently and handle greater volumes.
– Yunnan Yulinquan Liquor Co. Ltd. , our most recent acquisition is now integrated as part of international operations in the fourth quarter, and will play a bigger role in our growth in 2010.
• ASEAN
– Sales revenue grew by 71% led by Chang Beer, and Thai spirits sales volume led by Crown99 brand along with continuing positive growth in Inver House products and the introduction of non-alcohol products (Wrangyer and Power Plus) during the SEA Games in Laos.
53
• Inver House, part of Pacific Spirit UK, was acquire by ThaiBev in Oct 2006.
• 5 Distilleries under Inver House:
– Balmenach
– Pulteney
– Balblair
– Knockdhu
– Speyburn
• Key markets
– European Union
– USA
– Australia
• Inver House exports to over 80 countries, using 3rd party distributors
• ThaiBev can export Chang beer and other products to UK market, using the experience and distribution contacts of Inver House
Inver House
www.inverhouse.com
54
Latest Acquisition
• Acquisition of Yunnan Yulinquan Liquor Co., Ltd. (YLQ) in China– Dated: May 15, 2009– Acquire: all the equity interest– Total RMB 69 million -> one time payment by cash by Aug 31, 2009
• Valuation– Valuation by: Deloitte & Touche Financial Advisory Services Limited– Based on: income approach & market approach– Value: RMB 70.5 million
55
Latest Acquisition
About Yunnan Yulinquan Liquor Co., Ltd.• Location
– Eshan district, Yuxi town, the South of Kunming (the capital of Yunnan province)
• Products– Chinese white spirits (economy to premium segments)– Yulinquan is the leading brand– Key markets: Yuxi, Kunming and several cities in
Yunnan province
• Production capacity– 5,000 tons/year (at 50°) (base spirits) or
6,500 tons/year (finished products)
56
Latest Acquisition: Key Benefits
• Gateway into alcoholic beverage business in China– China market has been growing continuously
• Opportune business location– Yunnan population: ~45 million– Yunnan spirits market: ~200 million liters, RMB 20 billion in value– Yunnan province is one of the top alcohol beverage markets in China, with high growth
potential
• An ownership in one of the oldest & widely recognized spirits brand– Yulinquan is one of the oldest brands, in market for >250 years
• Platform for expansion into other businesses– Having white spirits business in China makes it is easier to enter into the beer business– Having business in Yunnan province, which is near Thailand, may elevate the possibility of
exporting ThaiBev products into Yunnan
• Management and teams– The management of YLQ can continue working, reducing the risk of business disruption– Opportunity for ThaiBev to tap into more capable Chinese staff from other sources in order to
expand the business in China
58
Financial Highlights
EBITDA = Earning before Interest Expense, Tax, Depreciation and Amortization
Source: Company’s Consolidated Financial Statement s 2009 (Thai GAAP)
Group 2008 2009 ChangeSales Revenue 105,452 107,969 2.4%COGS (75,326) (76,609)
% of Sales Revenue 71.4% 71.0%
SG&A & Other Expenses (15,314) (16,095) % of Sales Revenue 14.5% 14.9%
EBITDA from Normal Operation 20,081 19,910 -0.9%Net Profit from Normal Operation 10,238 10,643 4.0%Capital gain from Thai Alcohol Divestment 526 -
EBITDA 20,607 19,910 -3.4%Net Profit 10,606 10,643 0.3%
Less: Minority interests (264) (77) Net Profit belonging to the Company 10,342 10,566 2.2%
Margin*EBITDA from Normal Operation 19.0% 18.4%Net Profit from Normal Operation 9.7% 9.9% * margins are % of sales revenue
Group 2008 2009Total Assets 80,059 77,150 Total Equity Attributable to Equity Holders of the Company 53,763 56,211 Interest-bearing Liabilities 17,291 11,983
59
Financial Highlights
Ratios 31-Dec-08 31-Dec-09Current Ratio 1.54 1.85Total Debt to Equity 0.48 0.37Net Asset Value per Share (Baht) 2.14 2.24Net Asset Value per Share (SGD)* 0.09 0.09 * exchange rate at THB 24: SGD 1
Turnovers (days) Jan-Dec 08 Jan-Dec 09A/R Turnover 6 6Inventory TurnoverBeer Business
Finished Goods 32 40Spirits Business
Finished Goods (exc. Legacy Stocks) 68 59
Source: Company’s Consolidated Financial Statement s 2009 (Thai GAAP)
60
Peer Comparison
Source: ThaiBev’s Consolidated Financial Statements 2008 (Thai GAAP), Peers’ Annual Report 2008Remark: Peers include Asahi Breweries, APB, Carlsberg, Diageo, Heineken, A-B InBev, Kirin, Molson Coors, Pernod Ricard, SABMiller, San Miguel Genebra, Tsingtao
D/E = Total Debts/Total EquityMargin of “Net Sales” (Sales after Excise Tax)
Margin of “Net Sales” (Sales after Excise Tax)
EBITDA Margin
Net Profit Margin
D/E
ROE 25.40
10.60
Avr.
ThaiBev
P/E
Source: Reuters Knowledge Remark: Peers include APB, Carlsberg, Diageo, Heineken, Anheuser Bush InBev, Pernod Ricard, SABMiller, Tsingtao P/E is current P/E, last fiscal year, as of 14 May 09
1.59
0.48
Avr.
ThaiBev
19%
36%
Avr.
ThaiBev
10%
19%
Avr.
ThaiBev
14%
19%
Avr.
ThaiBev
61
Seasonal Sales:
• Q3 (the slowest) -> rainy season and the Buddhist Lent period• Q4 (the best) -> kind weather, many holidays, and end of the Buddhist Lent period
Look at Long Term Growth as Quarters can be Misleading
239
192
147
195
159 158
82
173
Q1 Q2 Q3 Q4
Beer Sales Volume (M Litres)
2008 2009
107 105
99
125 126 119
106
136
Q1 Q2 Q3 Q4
Spirits Sales Volume (M Litres)
2008 2009
62
Financial: Margins
Source: ThaiBev’s Consolidated Financial Statements 2009 (Thai GAAP)
29% 29%
19% 18%
15% 14%
10% 10%
2008 2009
Gross Profit EBITDA* EBIT Net Profit*
* EBITDA and Net profit from normal operation
63
11,681
15,327
2,514 2,288
0.47
0.61
2008 2009
M Baht
Free Cash Flow CAPEX FCF Baht/share
Financial: Cash Flow & Capital
* Free Cash Flow = CF from Operating Activities - CAPEX
Source: ThaiBev’s Consolidated Financial Statements 2009 (Thai GAAP)
Capital Structure Free Cash Flow
2008 2009
Non-current Liabilities 3,337 2,616
Current Liabilities 22,721 18,090
Total Equity 54,001 56,444
Million Baht
80,05677,150
64
CapEx Plan
Actual
2009 CapEx = 2.3 billion Baht
Budget
2010 CapEx = 4.7 billion Baht
2011 CapEx = 2.6 billion Baht
66
Dividend Payment
Dividend Payment Interim'09 Interim'10Net Profit belonging to the Company (M) 5,773 5,054 Number of Shares (M) 25,110 25,110 Interim Dividend (M) 3,767 3,767 Earnings per share (Baht) 0.23 0.20
Dividend Payout Ratio 65% 75%
Dividend per share (Baht) 0.15 0.15
67
Consolidated: H1’10 Highlights
Group H1'09 H1'10 ChangeSales Revenue 54,347 59,407 9.3%COGS (38,109) (42,760)
% of Sales Revenue 70.1% 72.0%
SG&A (7,483) (9,352) % of Sales Revenue 13.8% 15.7%
EBITDA 11,013 9,678 -12.1%Net Profit 5,814 5,108 -12.1%
Less: Minority interests (41) (54) Net Profit belonging to the Company 5,773 5,054 -12.4%
Margin*EBITDA 20.3% 16.3%
Net Profit 10.7% 8.6% * margins are % of sales revenue
68
317
245
77
4 6 24
308
248
109
4 12 41
Beer Spirits Oishi Energy drink Soda Water
Volume (M Liters)H1'09 H1'10
-2.8% 41.4%1.3% 105.1% 72.8%0.9%
Total Sales Volume
% increase/% decrease
69
Spirits
Sales revenue UP increase in sales volume and sales price to cover excise tax rise in May 2009
COGS (%) UP increase in raw material cost
SG&A (%) UP increase in donation expenses and product protection expenses
EBITDA DOWN increase in COGS and SG&A
Net Profit DOWN decrease in EBITDA although there was a decrease in interest expenses
Spirits H1'09 H1'10 ChangeSales Revenue 34,729 36,917 6.3%COGS (22,369) (24,585)
% of Sales Revenue 64.4% 66.6%
SG&A (3,634) (4,171) % of Sales Revenue 10.5% 11.3%
EBITDA 9,902 9,420 -4.9%Net Profit 6,016 5,703 -5.2%
Margin*EBITDA 28.5% 25.5%
Net Profit 17.3% 15.4% * margins are % of sales revenue
70
Beer
Sales revenue UP increase in sales price to cover excise tax rise in May 2009
COGS (%) UP company adjusted sales price to cover the amount of tax rise (Baht),
this reduced margin in terms of percentage of sales, although
packaging costs decreased
SG&A (%) UP increase of sales promotion expenses
EBITDA DOWN increase in SG&A
Net Profit DOWN decrease in EBITDA although there was a decrease in interest expenses
Beer H1'09 H1'10 ChangeSales Revenue 15,925 17,295 8.6%COGS (13,395) (14,681)
% of Sales Revenue 84.1% 84.9%
SG&A (3,048) (3,739) % of Sales Revenue 19.1% 21.6%
EBITDA (Loss) 443 (282) -163.7%Net Profit (Loss) (560) (824) -47.1%
Margin*EBITDA (-Loss) 2.8% -1.6%
Net Profit (-Loss) -3.5% -4.8% * margins are % of sales revenue
71
Non-alcoholic Beverages
Sales revenue UP increase of Oishi beverages, soda and water sales
COGS (%) UP change in product mix of Oishi created higher cost, and increase in raw material cost
SG&A (%) UP increase in advertising and marketing expenses
EBITDA DOWN increase in SG&A
Net Profit DOWN decrease in EBITDA although there was a decrease in interest expenses
Non-alcoholic Beverages H1'09 H1'10 ChangeSales Revenue 2,319 3,395 46.4%COGS (1,443) (2,371)
% of Sales Revenue 62.2% 69.8%
SG&A (533) (877) % of Sales Revenue 23.0% 25.8%
EBITDA 526 357 -32.1%Net Profit 301 143 -52.5%
Margin*EBITDA 22.7% 10.5%
Net Profit 13.0% 4.2% * margins are % of sales revenue
72
Food
Sales revenue UP increase in the number of branches and an increase in selling price
COGS (%) UP increase in food costs due to a greater variety of foods
SG&A (%) DOWN sales growth is higher than the increase in SG&A
EBITDA UP increase in gross profit
Net Profit UP increase in EBITDA and a decrease in interest expenses
Food H1'09 H1'10 ChangeSales Revenue 1,558 1,856 19.1%COGS (915) (1,162)
% of Sales Revenue 58.7% 62.6%
SG&A (586) (606) % of Sales Revenue 37.6% 32.7%
EBITDA 142 183 28.9%Net Profit 57 86 50.9%
Margin*EBITDA 9.1% 9.9%
Net Profit 3.7% 4.6% * margins are % of sales revenue
73
Interest Bearing Debt
Interest Bearing Debt 31-Dec-09 30-Jun-10(Million Baht)
CurrentBank overdrafts 655 362 Short-term loans from financial institutions 5,063 7,631 Current portion of long-term loans 3,765 4,090
9,483 12,083 Non-currentLong-term loans from financial institutions 2,500 -
2,500 - Total 11,983 12,083
74
Current ratio DOWN increase in current liabilities
Financial Ratios
Note: use 365 days to calculate turnover
Ratios 31-Dec-09 30-Jun-10Current Ratio 1.85 1.65Total Debt to Equity 0.37 0.37Net Asset Value per Share (Baht) 2.24 2.25Net Asset Value per Share (SGD)* 0.09 0.09 * exchange rate at THB 24: SGD 1
Turnovers (days) Jan-Dec 09 Jan-Jun 10A/R Turnover 6 6Inventory TurnoverBeer Business
Finished Goods 40 24Spirits Business
Finished Goods (exc. Legacy Stocks) 59 55
76
Production Capacity
Source: IPO Prospectus, 2006 Annual Report
SuratThaniSuratThani
Chiangmai
KhonkaenNakornsawan
Suratthani
Samutsakorn
Prachinburi
Ratchaburi
Nakornpathom (3)
PathumthaniBurirum
NongkaiUttaradit
UbonratchathaniKanchanaburi (3)
THAILAND
18 Well-Run Distilleries Throughout
Thailand help us:
– Secure local consumers’
preferences
– Establish barriers to entry
– Save transportation costs
SuratThaniSuratThani
THAILAND
Ayuthaya: 2
Kamphaengphet
Beer
Production Capacity (M Liters) 1,550
Kamphaengphet 900
Bang Ban 530
Wang Noi 120
Avr. Utilization rate (approx.) 40-50%
Spirits
Production Capacity (M Liters) 819
Avr. Utilization rate (approx.) 60-70%
Non-alcoholic Beverage
Soda & Water
Production Capacity (M Liters) 700
Soft Drinks
Production Capacity (M Liters) 324
77
Beer Brewing Process
By-productYeast -> Animal Feeds (Additive Food Co.)Diatomite -> Brick (Charun Business 52 Co.)
Bottling
Filtration
Fermentation/Maturation (21 days)
Brewing
Coarse filter using Diatomaceous Earth
Wort + YeastMalt +(Adjunct eg. Rice)
Mashing
Wort separation
Clear Wort + Hops
Whirlpooled
Boiled
CooledPolishing filter
Carbonation
Bright beer
Finished product
78
Spirits Distilling Process
MixingAging
(3-8 years)Distillation
Molasses Yeast Steamed Rice Mold Water
FermentedMash
Slops(Spent Sludge)
AlcoholWhite Spirit (Alcohol + Water)
Chinese Herb Spirit(White Spirit + Water +Chinese Herb + Caramel)
Brown Spirit(Alcohol +Water +
Concentrate +Caramel)
By-productSlops -> Fertilizer (Bionic Humus Co.)
Fermentation(7 days)
79
Quality System
Many ThaiBev’s factories have received quality certificates, e.g.
• ISO 9001
• ISO 14001
• GMP (Good Manufacturing Practice)
• HACCP (Hazard Analysis and Critical Control Point)
Waste Management
We operate a highly efficient waste water treatment facility to minimize adverse environmental impact on the river. We use many types of water treatment, for example
� Aerobic System - Activated Sludge
� Anaerobic system - receive bio-gas as a by-product
� Coagulation & Flocculation – Chemical treatment
Quality System and Waste Management
80
For More Information
Thai Beverage PLC.14 Vibhavadi Rangsit Rd., Chomphon, Chatuchak, Bangkok 10900 THAILAND
Panya ThongchaiOffice: +662 127 5035E-mail: [email protected]
Namfon AungsutornrungsiOffice: +662 127 5037E-mail: [email protected]
Ariya SilakornOffice: +662 127 5036E-mail: [email protected]
Investor Relations DepartmentE-mail: [email protected]
Corporate website: www.thaibev.comIR website: www.thaibev.com/set/investor.html
Contact
Website