Food and drink giants Suntory and PepsiCo have announced an agreement to form a joint venture beverage business in Thailand.
The two companies say that the venture will build on PepsiCo's existing position in the region, and create new growth opportunities for both groups in the market.
Under the terms of the agreement, the PepsiCo Thailand beverage business will change its name to Suntory PepsicCo Beverage (Thailand), and retain a 49% share of the venture, while Suntory will gain the other 51%.
Suntory and PepsiCo management will both hold key roles in the leadership of the new partnership.
Strategic Deal
In the last five years, PepsiCo has invested hundreds of millions of US dollars in Thailand, including the creation of two beverage and two food manufacturing plants.
Suntory, meanwhile, has a strong business in Asia Pacific, and the expansion into Thailand's beverage business has been a key part of the company's long-term plans.
"Suntory views Southeast Asia as a strategic priority, which we anticipate will continue to have high growth due to rapid urbanization and a younger population relative to other regions," said Shekhar Mundlay, CEO of Suntory Beverage & Food Asia's beverage division.
"PepsiCo has already established a solid foundation with its portfolio of iconic brands and excellent manufacturing and distribution system. We look forward to Suntory PepsiCo Beverage (Thailand) building on this foundation to grow the business in Thailand even further through an expanded product portfolio."
Adel Garas, president of PepsiCo's Asia Pacific region, added that this partnership would create a platform for "continued growth" in the region.
"To remain competitive and position ourselves to continue to deliver sustainable, profitable, long-term growth, we must always ensure we have the right business model to meet the needs in a given market," he said.
The two companies have a record of working together in other markets, such as the US, Japan, Vietnam and New Zealand.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
