E-Malt.com News article: Japan: Suntory Holdings Ltd aims to double revenue at its Beam business

Japan's Suntory Holdings Ltd aims to double revenue at its Beam spirits business to $10 billion in five years as it capitalises on the growing popularity of drinks like whisky and bourbon and forays further into developing markets, its new president was quoted as saying by Reuters on February 5.

Suntory last year bought U.S. bourbon maker Beam for $16 billion, propelling the company to rank No. 3 in the global spirits market after Diageo and Pernod Ricard.

The company, the first to bring single malt whisky to Japan in the 1920s, has set itself ambitious growth plans - aiming for a near doubling of overall revenue to 4 trillion yen ($34 billion) by 2020 compared to levels expected for last year.

Former president Nobutada Saji had said another acquisition may be necessary to help meet that goal, but Takeshi Niinami said the jump in popularity of so-called brown liquors had meant much of that growth could be achieved without a big purchase.

"I am not ruling out acquisitions as possibility. There could be small ones along the way," he told Reuters in an interview.

"But we can exceed 4 trillion yen without an acquisition of Beam's scale, one that would be worth hundreds of billions of yen," he said.

Niinami, who took the helm at Suntory in October, said the Jim Beam brand had room to grow in India, Latin America, Japan as well as the United States, and the company's position as a privately held firm would work to its advantage.

"Brown spirits need to mature for a long time before they are ready. That is something that equity markets are not patient about. In that sense, we have an edge."

The surprise appointment of Niinami, the first president to come from outside Suntory's founding family, has sparked speculation that the company will restart merger talks with Kirin Holdings Co, Japan's No. 2 beer maker. Niinami has close ties to the Mitsubishi group of firms which includes Kirin.

But Niinami said that if Suntory wanted to achieve its earnings goals, it would have to concentrate on areas other than beer as becoming one of the world's top 3 brewers could be too much of a challenge.


06 February, 2015