Two drinks giants, Suntory Beverage & Food Asia Pte Ltd and PepsiCo, confirmed yesterday that they will form a joint venture to expand in Thailand.
Under the agreement, Suntory will hold a 51% stake in the joint venture and PepsiCo will hold 49%.
Operations are under International Refreshment Thailand Co Ltd, which will change its name to Suntory PepsiCo Beverage Thailand Co Ltd.
Top executives from the two sides will hold key positions in the joint venture, which will make and distribute drinks.
The cooperation between the pair is not a first. Suntory and PepsiCo have worked together in other markets, such as the US, Japan, Vietnam and New Zealand.
According to Shekhar Mundlay, chief executive of the drinks division at Suntory Beverage & Food Asia Pte Ltd, the company views Southeast Asia as a strategic priority because the region has witnessed high growth driven by rapid urbanisation and a younger population relative to other regions.
Thailand in particular stands out as a high-potential, dynamic market, Mr Mundlay said.
Suntory has accelerated its global strategy and continuously expanded its food and drinks business in Asia-Pacific.
The firm established its regional headquarters in Singapore, but expansion in Thailand is a key part of Suntory's long-term plans.
Suntory makes Brand's chicken essence in Thailand, which is the production base for the food supplement in the region.
In addition, Suntory has a strong portfolio of brands including Ribena fruit juice, CC Lemon cola drinks, ready-to-drink Tea Plus, Good Mood functional drinks and My Cafe canned coffee.
Adel Garas, president of PepsiCo Asia-Pacific, described Thailand as a critical and strategic market for PepsiCo in the region.
The company has a long history in the country, stretching back to the local launch of Pepsi-Cola in 1952.
"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," Mr Garas said.
"We believe the joint venture with Suntory provides us with a strong partner and platform for continued growth in Thailand," he added.
Over 2012-16, PepsiCo invested hundreds of millions of dollars in Thailand through its food and drinks businesses.
In 2012, PepsiCo opened its first drinks plant in Thailand, at Amata City Industrial Estate in Rayong province, followed by a second in 2016 at Nong Khae Industrial Estate in Saraburi province.
