Asahi Forms Soft Drink Venture With Thailand's Osotspa

TOKYO (Nikkei)--Asahi Group Holdings Ltd. (2502) will launch its soft drink business in Thailand through a joint venture with local beverage giant Osotspa Co. Ltd, as Asahi seeks to grow nonalcoholic beverage sales in Southeast Asia by more than sixfold from 2012 levels to 100 billion yen in 2015.

Asahi subsidiary Calpis Co. and Osotspa will set up a production and marketing company this month. The business will be capitalized at around 1.1 billion yen, and Calpis will hold a majority stake. This will mark the first joint overseas venture for Calpis since it became part of the Asahi group in October 2012.

The partners will first subcontract locally production of Calpis brand lactic beverages in plastic bottles, which will be sold at supermarkets and other outlets via Osotspa's extensive distribution network. The venture plans to open its own production facility next year, which will likely cost more than 1 billion yen. Construction is slated to start this year.

Calpis previously entered the Thai market in 1997 via a local unit. But operations have virtually halted since floods in 2011 damaged production facilities. Asahi will bring back the business, believing Calpis has a certain level of brand strength in the country.

Asahi will also consider exporting Calpis from Thailand to surrounding nations such as Malaysia and Indonesia.

(The Nikkei, March 14 morning edition)

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