Vietnam: Big Breweries Judged More Advantageous

Article taken from the Vietnamese newspaper Le Courrier du Vietnam of August 5, 1998
Translated from French by Robert West on November 18, 1998

     "We provisionally cease constructing small breweries. It is the enlargement of those already in the field and more profitable that we concentrate investments on", declared Nguyên Van Viêt, president of the board of directors of the General Company for Spirits, Beer and Beverages.
     The land counts 320 breweries with a total capacity of more than 600 million liters per annum, of which 45 per cent are brewed by joint-venture companies founded in cooperation with foreign groups. Every province has its own breweries, which mostly produce less than one million liters per annum. Three quarters of the national production come from 5 per cent of the 320 breweries, each having a capacity of 10 million liters. In spite of being one of the most important taxpayers, the sector does, however, also have its dark sides: Many companies of smaller extent are in the red due to outdated equipments. Two-hundred and fifty are under-utilized, using only half of their capacity. Even the two giants, the breweries Saigon and Hanoi, - they own 40 per cent of the market shares - make use of only a third of their capacity. The breweries Hai Phong, Dà Nang, Khanh Hoà and some others show deficits, profits not sufficing to pay back loans raised for the renewal of technologies. Another element cutting the quality of the beer is the bad quality of the water.
     Out of ten joint-ventures six are already operational, which are the breweries Vietnam, Tiên Giang, Dông Nam A, Dà Nang, Rông Vàng and Huê. Three others, Praha-Hà Tinh, Dông Thap and Nghê An, are fighting financial difficulties. That is a brief survey of the branch.
     Still according to Mr. Viêt, government has adopted the enlargement project of the breweries Saigon and Hanoi because of their important tax contributions to the state's budget. The one mentioned first is going to have a new annual capacity of 50 million liters and seven satellite breweries in six southern provinces at its disposal; it is a total of 882 billion dongs, based on funds through long-term payments. Each brewery is going to brew 10 million liters per annum. "Certain factories will be closed down, but the output of the breweries Saigon and Hanoi will be sufficient to fulfill the demand", affirms Mr. Viêt, underlining that some breweries in the local sector will shortly receive technical support from the general company in order to improve their production.