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The investment is prompted by increasing consumption volumes, with the 2016 total packed liquid dairy and fruit-based beverages intake at 70 billion litres across ASEAN, South Asia, Japan, Korea, Australia and New Zealand.
Additionally, over the next three years, these markets are likely to grow at a healthy 5.6 per cent per annum, with products packed in Tetra Pak cartons projected to grow at a much faster rate as compared to other packaging formats such as bottles and cans.
“Over the years, we have seen substantial growth of our products, driven by a wide portfolio and a number of innovations that we have introduced in the market. Hence our investment in a new plant, which will be our fourth packaging material factory in the region, providing us expansive coverage and scale, allowing us to serve our customers faster and better,” said Michael Zacka, regional vice president, Tetra Pak South Asia, East Asia and Oceania. “This decision is a strong reflection of our commitment to the region and our firm belief in its future potential.”
The greenfield factory is expected to start commercial operations by early 2019. Situated near Ho Chi Minh City, the country’s economic hub, it will be ideally positioned to meet the demand for packaging material of food and beverage manufacturers in Vietnam, other ASEAN countries, Australia and New Zealand.
“For manufacturers based in Vietnam, the new factory will bring a host of unprecedented benefits such as consistent supply, reduced lead time, efficiency and flexibility,” said Robert Graves, managing director of Tetra Pak Vietnam.
The factory will have an expandable production capacity of approximately 20 billion packs per annum, across a variety of packaging formats, including the popular Tetra Brik Aseptic and Tetra Fino Aseptic. With a strong focus on sustainability, the site will adopt a host of global best practices to minimise the environmental footprint, including the utilisation of a high proportion of renewable energy sources.
This investment will complement Tetra Pak’s three long-standing production facilities in Singapore, India and Japan, building on the wealth of experience collected throughout the company’s historical tenure. Together, the factories will enable the company to offer more innovations, efficiency and customer service to meet the rapid growth in Asia and in Vietnam in particular.
“The new factory reflects Tetra Pak’s confidence in the local economy, and will cater to a rise in domestic consumption for healthy, ready-to-drink beverages among the country’s growing middle class,” said Graves. “Two key attributes to this are the Vietnam’s real wage increase (the largest in Asia at 7.3 per cent), and growing consciousness among consumers on health issues and food safety.”
In Vietnam, the dairy category, the country’s biggest category and a core business for Tetra Pak is projected to grow steadily, with per capita consumption potentially doubling to 28 litters by 2020 from 15 liters in 2010. Tetra Pak estimates the country will consume a total of 3.3 billion litres of packed liquid dairy and fruit based beverages in 2016. It foresees an average growth of 6.5 per cent per annum during the 2016- 2019 period.
“Packaging is critical to the industry, and the new factory will definitely be a boost to the development of the local food and beverage industry, contributing to Vietnam’s socio-economic growth and integration progress into the regional supply chain,” said Graves.