losses due to fierce competition
and costs related to promotional
activities.
HiteJinro has been actively tapping
overseas markets lately. In January,
HiteJinro Philippines was established
in Manila, the capital of the
Philippines. The Philippine subsidiary
is an overseas corporation established
three years after the establishment
of the Vietnam subsidiary
in 2016. It is the company’s
sixth overseas subsidiary after
those in Japan, the United States,
China, Russia and Vietnam. M
Beck’s, Löwenbräu, Budweiser,
and Hoegaarden. In 2019, Oriental
Brewery saw an operating profit of
around 409 billion South Korean
won.
Established by the Doosan Group
in 1952, it was purchased by InBev
in 1998. In July 2009, it was sold
by Anheuser-Busch InBev as the
parent company sought to reduce
its debt. It was sold to an affiliate
of Kohlberg Kravis Roberts & Company.
Anheuser-Busch InBev (AB
InBev) has retained the right to purchase
OB five years from its sale,
at predetermined financial terms.
In April 2014, AB InBev executed
its right to repurchase OB. OB
became a subsidiary of AB InBev
again. Today OB produces several
of Korea’s most popular beverages
including the OB, Cass and Cafri
lager brands.
In 2019, there was a number of
speculations that AB InBev has
been contacting local retail conglomerates
such as Lotte and
Shinsegae, as well as private
equity funds via foreign securities
companies to sell its stake in the
Oriental Brewery. Market speculations
have risen that AB InBev
plans to sell its Asian business to
secure more funds to reduce its
$102.5 billion debt accumulated
from its $100 billion-plus takeover
of rival SABMiller in 2016. However,
later the company’s CEO denied
these speculations as mere rumors.
HiteJinro
HiteJinro is the second largest beer
producer in South Korea. The company
is a merger between two alcohol
companies: Hite Brewery
and Jinro. Hite Brewery was established
in 1933 as a liquor company.
Jinro was established in 1924 as
the first Korean beer company.
In 2006, Jinro was acquired by
Hite, thereby forming HiteJinro.
In 2019, the company surpassed
2 trillion won in sales on the back
of the popularity of “Terra” beer
and “Jinro Is Back” soju and made
a turnaround in seven years. The
company share of the beer market
has risen from 27 percent in 2018
to 33 percent in 2019. HiteJinro’s
beer business has been losing
money for the past few years. The
company posted a 22.5 billion won
($19 million) operating loss in 2014,
and since then continued to suffer
Yogender Malik
He is a New Delhi
(India) based freelance
writer on Indian and
South Asian industry
and economy. He has
been writing about
the glass, ceramic,
construction, and
automotive industry
of the region for more
than ten years. Equipped with engineering
and business administration degrees, he
also works as an analyst on these industries
with a New Delhi based organization.
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