Suntory Beverage & Food (SBF), part of the Suntory Group, is gearing up to boost production capacity in Thailand and Vietnam.
Makiko Ono, president and chief executive of SBF, said the Asia-Pacific region is a vital growth driver for the company, highlighting the significant potential in Thailand and Vietnam as key markets.
To support this ambition, SBF plans to strengthen its global capital expenditure.
Between 2024 and 2026, the company intends to invest roughly US$2 billion, an increase from $1.32 billion during 2021-23.
The investment budget will be allocated to various locations including logistics improvement in Europe and production capacity expansion in Thailand and Vietnam.
The investments in Asia Pacific make up 40% of the total budget.
"We are building a new factory in Vietnam. In Thailand, we are now expanding our capacity by installing two new production lines this year and next year," Ms Ono said.
She also noted that the purchasing power of Thai consumers may be affected by the stagnant economy.
To tackle the challenge, the company is focusing on product innovation and the introduction of new offerings to the market, along with enhanced marketing efforts, she said.
Ms Ono added that the company anticipates significant growth driven by the Asia-Pacific region.
The company forecasts a compound annual growth rate (CAGR) for sales in the Asia-Pacific market of 9% for 2023-26, outpacing the overall industry expectation of 5-6%.
For the Japanese market, SBF anticipates a CAGR of 2%, which also exceeds the overall market growth expectation of 0-1%.
In Europe, the company projects a growth rate of 5%, compared to an industry expectation of 2-3%.
In the Americas, sales are expected to grow at 5% during 2023-26, while the overall industry growth expectation stands at 3-4%.
In 2024, the company achieved net sales of $11 billion, with 44% of that coming from Japan, 24% from Asia Pacific, 21% from Europe and 11% from the Americas, she noted.
Additionally, Ms Ono said the Suntory Group has plans to introduce ready-to-drink alcoholic beverage products to the Oceania market.