Vietnam’s top brewers continue state divestment in 2017

Bui Truong Thang, deputy director general of MoIT’s Light Industry Department, said Habeco will submit its divestment plan to the ministry next week and Sabeco’s divestment plan will also be submitted before the end of this month.

“Right after receiving approval from Prime Minister Nguyen Xuan Phuc for the plan to sell stakes in Habeco and Sabeco, MoIT will speed up the divestment process to carry it out in 2017,” said Thang.

The government's plan to exit Sabeco and Habeco has been on the agenda for several years. They are among the few state-owned enterprises that have performed extremely well these past years. Sabeco, the country's second-biggest listed firm by market value, is the key plank in a broader equitisation effort, which includes dairy firm Vinamilk, Vietnam Airlines, and Habeco.

Habeco’s 2016 profit before tax was only $44 million from a revenue of $461 million. Meanwhile, Sabeco has confirmed a new pre-tax profit record of $252 million from a revenue of $1.352 trillion.

The state still owns 81.79 per cent of Habeco, while its employees own 0.56 per cent, other shareholders 1.88 per cent, and strategic investor Carlsberg 15.77 per cent, according to MoIT’s report in August 2016.

This report announced that the sale of state capital at Sabeco, meanwhile, will be carried out in two phases. The first phase will divest 53.59 per cent of state stakes, worth VND24 trillion ($108 billion), and the second will sell 36 per cent, worth VND16 trillion ($720 million).

The state sales must be carried out publicly and transparently following market mechanisms and international practices in order to avoid interest groups causing damage to the state and shareholders.

Vietnam has one of the world's most attractive beer markets and the biggest in Southeast Asia, thanks to a young population that consumed nearly four billion litres in 2016. Several foreign brewers have been eyeing Sabeco since it was earmarked for equitisation, such as San Miguel, Heineken, Asahi, Kirin, SABMiller, and Thai Beverage.

Prime Minster Nguyen Xuan Phuc previously emphasised that state divestment from a number of SOEs must be completed by them listing, to protect state assets. The state divestment from Sabeco and Habeco in particular must be carried out in this manner, and the pace of equitisation needs to be accelerated.

The two Vietnamese brewers Habeco and Sabeco completed the listing process, as both were listed on the Ho Chi Minh City Stock Exchange, Habeco in January 2017 and Sabeco in December 2016.