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Extending joint venture partnership in Mongolia to
a new level
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Expanding business scope and opportunities with
venture into vodka
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New income stream from vodka to enhance APB Group
earnings from Mongolia
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Significant synergies expected
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Access to new customer base and more
distribution channels
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Export opportunities for Mongolian vodka
brands
Five years after it invested in a brewery in Mongolia
with a local partner, Asia Pacific Breweries Ltd (APB) is
taking that co-operation to another phase. This new
development will see APB purchasing 27,516,387 ordinary
shares of Mongolian Beverages Company Pte. Ltd (Mongolian
Beverages) from Grandkhaan Holdings Limited (Grandkhaan)
and its controlling shareholder for MNT 29,139,876,845
(approximately SGD 27.7 million). The remaining
26,437,313 ordinary shares of Mongolia Beverages will be
retained by Grandkhaan.
"We have a positive and constructive working
relationship with our partner in Mongolia. We share
the same business focus - an absolute commitment to
quality, a desire to exceed consumer expectations and
strong relationship with our trade partners. We also
share similar corporate values and commitment to social
responsibility. Growing our partnership with them is
exciting as is the potential within the Mongolian
market," said Mr Roland Pirmez, Chief
Executive Officer, APB.
Mongolian Beverages will engage in the production,
marketing, sales and distribution of vodka and spirits in
Mongolia. It will offer brands such as
Grandkhaan, Chinggis, Khubilai, Xappa and
Eruu which are familiar vodka names amongst
consumers in the market.
"Our maiden investment in the spirits sector in
Mongolia will enhance APB's growth in the Mongolian
alcohol market. Though Mongolia is predominantly a vodka
market, beer is increasingly gaining popularity. Our
diversification into vodka will strategically enable
us to build a multi-beverage portfolio to ensure
our relevance, sharpen our competitive edge and drive
greater top line gain in Mongolia," continued Mr
Pirmez.
Apart from generating a new income stream for APB, the
vodka business will improve the position of the brewer as
a multi-beverage player with product offerings in both
beer and vodka - something that the market demands.
Combining the merits of the two joint venture partners -
Grandkhaan's expertise in vodka production and market
know-how as well as APB's marketing capability and
extensive export network worldwide - Mongolian Beverages
will pursue the ambition for greater local success and
take Mongolia's home grown vodka brands such as
Chinggis to the world via the export network of
APB that spans 60 countries.
Upon completion of the deal, both the beer and vodka
businesses will share the same sales and distribution
infrastructure. This means that a larger portfolio of
products can be delivered to a wider reach of outlets and
markets more efficiently, thereby improving margins.
Moreover, with the enlarged distribution network, the
beers of APB including Tiger, Sengur and
Jalam Khar will gain access to previously
untapped retail channels as well as markets, particularly
those beyond the capital city of Ulaan Baatar.
APB started its beer brewery operation in Mongolia in
2007. Last year, its business in Mongolia recorded a
volume gain of 15% versus the year before.
This press release is to be read with the SGX
announcement.
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