Japan: Sapporo Holdings Ltd. plans to invest $592 mln to triple profit by 2008
Sapporo Holdings Ltd., Japan's third-biggest brewer, announced on February 20 it plans to boost its capital investment in the next three years and will aim to almost triple its operating profit over the same period, according to Reuters.
The country's beer industry faces a shrinking domestic market due to a falling birthrate and an ageing population, putting pressure on beer makers, including industry leaders Asahi Breweries and Kirin Brewery , to diversify their operations and product lineups.
Sapporo said it has earmarked 70 billion yen ($592 million) for investment by the end of 2008, including mergers and acquisitions, alliances, and research and development. A Sapporo spokesman said the company had invested some 21 billion yen in the last two years.
Under a three-year business plan, the company said it would aim for a group operating profit of 28 billion yen in 2008, compared with the 10.3 billion yen it posted in 2005, partly by cutting 10 billion yen in operational costs.
In its core alcohol business, Sapporo said it would expand its non-beer operations, such as shochu and low-alcohol beverage sectors, to respond to shifts in consumer tastes. Shochu is a distilled alcohol made from ingredients such as sweet potatoes. ADVERTISEMENT
Sapporo will enter the growing shochu business this April by buying some operations from soy sauce maker Kikkoman Corp.
Despite sluggish domestic beer sales, Sapporo said the alcohol market still has growth potential, particularly among female and "active senior" consumers. The company, which also has food and real estate operations under its umbrella, will aim for sales of 520 billion yen in 2008, up 15 percent from its 2005 result.
Sapporo last week reported a 56.4 percent drop in its 2005 operating profit but forecast that figure would rise 63 percent this year to 16.8 billion yen. Shares in the company closed down 3.02 percent at 579 yen on Monday. The Nikkei average ended down 1.75 percent. ($1=118.30 Yen)
Tilbage
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