ChangBeerThailand

The story of Thailand’s second richest entrepreneur with a networth $13 Billion

Born in 1944 Thailand, Mr Charoen Sirivadhanabhakdi was sixth among the 11 children of a Chinese street vendor hawking mussel pancakes in Bangkok’s Chinatown.

By age nine, he was already selling a lottery-like game to neighbourhood kids, according to a Forbes profile in 2005. He then started a trading business, and began supplying products to a government-owned distillery producing Thai whisky.

In a significant move in the early years, he successfully obtained rights to produce for 15 per cent of the market, thus becoming a distiller in his own right.

In 1985, the remaining licences for 85 per cent of the liquor market were opened up for bidding. According to the Forbes article, Mr Charoen’s business vehicle Thai Charoen Corp, or TCC, borrowed US$200 million and won all the concessions. In one stroke, he established a monopoly in distilled spirits in Thailand.

TCC’s beer story started later in the 1990s, when the Thai government liberalised the beer market. Mr Charoen initially partnered Danish brand Carlsberg to make and distribute the tipple in Thailand.

But Mr Charoen was soon making his own beer, dubbed Chang or Thai for “elephant”, around 1995 to 1996.

At that time, Singha, or the “lion” brand, had a stranglehold on the Thai beer market. Singha was made by the venerable privately owned Boon Rawd Brewery.

But Chang, Mr Charoen’s working-class label, was cheaper, stronger in alcohol content, and sold well in rural areas.

The upstart Chang took advantage of the complacency of the sleeping lion, especially during the Asian financial crisis of 1997 that hit Thailand hard. Chang, cheap and good, had wrested a majority of the beer market share by 1999, and maintained that position for a few years.

Faced with Singha’s decline, Boon Rawd fought back through its cheaper Leo beer brand, which did very well. Chang’s market share declined from 64 per cent in 2003 to 31 per cent in 2009, around where it has stayed in the last few years, based on estimates made by Credit Suisse.

CIMB noted in its May 18 report that before the rebranding of Chang last year, Leo had a market share of 51 per cent. CIMB analyst Kenneth Ng, who co-authored the report, tells us that Chang’s share was 30 per cent, while Singha was at just 10 per cent.

Meanwhile, amid a growing Asia, Mr Charoen’s ambitions ranged far and wide. Even in 2009, Mr Charoen had apparently considered acquiring stakes in Singapore food and beverage and property conglomerate Fraser & Neave (F&N) and Tiger beer maker Asia Pacific Breweries (APB), from OCBC and Great Eastern. APB was itself a long-running joint venture between F&N and Dutch beer giant Heineken.

In 2012, Mr Charoen finally got his way and the deal went through. He grandly upset the order of things, triggering a bidding war that became one of Singapore’s most exciting corporate stories in recent memory.

It all ended with Heineken acquiring APB and Mr Charoen adding what’s left of F&N to his business empire. Hence, ThaiBev now owns stakes in F&N and its property spinoff, Frasers Centrepoint Limited.

Meanwhile, Mr Charoen’s TCC group is also involved in industry, agriculture, finance, insurance and real estate.




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