Suntory Holdings hopes to generate 1 trillion yen ($9.72 billion) in distilled-liquor sales in 2020 by tapping into the sales network of newly acquired U.S. whiskey giant Beam, Nobutada Saji, the Japanese company's president, said Thursday. Suntory completed the acquisition of Beam on May 1, turning it into Beam Suntory. In 2013, Beam posted sales of some 320 billion yen. Combining this tally with Suntory's distilled-liquor sales would bring the total to about 600 billion yen in terms of shipments, the third-largest in the world.
Beam's sales network spans 120 markets worldwide, and its mainstay whiskey brands, such as Jim Beam and Teacher's, command high market shares in emerging economies as well. Suntory will use the extensive sales channels to sell its Japanese whiskeys, including Yamazaki and Hibiki.
Beam Suntory's Chief Executive Officer Matthew Shattock, speaking at a news conference here with Saji on Thursday, said the business has ample growth potential because Japanese whiskey is highly regarded worldwide, yet overseas markets account for a mere 5% or so of Suntory's total whiskey sales.
Toward 2020, Suntory will work to grow distilled-liquor sales by 5% annually in developed countries and 15% in emerging markets. The focus markets include Brazil, Russia, India, China and Mexico. It will add production equipment at a Yamanashi Prefecture distillery in preparation for higher exports.
Suntory's interest-bearing debt has risen to 1.5 trillion yen, after shelling out 1.6 trillion yen on the Beam purchase. The company will have to spend about 25 billion yen a year in interest payments and some 30 billion yen annually to amortize Beam's goodwill, forcing it to find ways to offset the negative impact of this heavy debt burden. "Although increased borrowings are a risk, (the acquisition) was the only chance Suntory had to survive in the global whiskey market," Saji said.
(Nikkei)
Beam Suntory's Chief Executive Officer Matthew Shattock, speaking at a news conference here with Saji on Thursday, said the business has ample growth potential because Japanese whiskey is highly regarded worldwide, yet overseas markets account for a mere 5% or so of Suntory's total whiskey sales.
Toward 2020, Suntory will work to grow distilled-liquor sales by 5% annually in developed countries and 15% in emerging markets. The focus markets include Brazil, Russia, India, China and Mexico. It will add production equipment at a Yamanashi Prefecture distillery in preparation for higher exports.
Suntory's interest-bearing debt has risen to 1.5 trillion yen, after shelling out 1.6 trillion yen on the Beam purchase. The company will have to spend about 25 billion yen a year in interest payments and some 30 billion yen annually to amortize Beam's goodwill, forcing it to find ways to offset the negative impact of this heavy debt burden. "Although increased borrowings are a risk, (the acquisition) was the only chance Suntory had to survive in the global whiskey market," Saji said.
(Nikkei)
