Thailand’s vibrant can packaging industry
Image: Boon Rawd Brewery Co
Yogender Malik offers an introduction to the rapid growth of the Thai metal can packaging industry over the past twenty years
Thailand has emerged as a vibrant market for beverages – both alcoholic and non-alcoholic – and packaged food in the Southeast Asian region over the last two decades. Huge consumption and rapid growth of these products have presented considerable opportunities for metal can packaging producers in the country.
Overview
Catered by about 45 packaging can producers in beverage and food sub-segments, Thailand’s metal can producers have been through a series of fluctuations during the past decade.
The beverage sector in the country has become a significant user of aluminium and steel cans. Aluminium packaging for beer, carbonated soft drinks, and energy drinks is also increasing its dominance in other product segments such as iced teas and coffee-based refreshments. Japanese metal can-producing companies have a significant presence in Thailand’s beverage can market through joint ventures or as stakeholders in the Thai companies.
The canned food market is also growing steadily, with a shift towards processed, frozen and pre-prepared foods.
The rising popularity of metal cans in Thailand can be attributed to several factors, such as an increase in off-premises consumption, as well as consumer demand for new beverage options (e.g., energy drinks, functional drinks and fruit juices), where cans are the preferred packaging medium.
The need for convenience and portability is another important factor behind the increased usage of metal packaging in all the major sub-segments in the country. In addition to convenience, metal packaging also enables beverage and food producers to create unique labels that visually highlight a brand or product in the crowded supermarket aisle. The ongoing trend towards the use of canned food products, owing to their exceptional food preserving qualities, has prompted their use within the packaged food industry.
Demand drivers
Thailand is buoyed by a strong and growing consumer base. The country has a sizeable population (about 70 million) and is highly urbanised. With a per capita income of USD $7,100, the country is considered as a consumption ‘sweet spot’ for alcoholic and non-alcoholic beverages and packaged food products.
Beverage packaging
Thailand accounts for an estimated consumption of 8.5 million beverage cans for packaging. Overall, the Southeast Asian beverage can market size is estimated at 26 billion cans per year. Though currently Thailand only accounts for 2.23 per cent of the global demand of around 380 billion cans per year, the country holds great promise for can packaging.
The country’s beverage producers have increased the share of metal packaging for their products in recent years. For example, leading beverage producer TCP Group packages 62 per cent of its beverage products in aluminium or steel cans. Glass accounts for 21 per cent of the total packaging, while paper and PET packaging account for nine per cent and eight per cent of the total packaging of the group’s beverage products, respectively.
Better known for its iconic energy drinks product, Red Bull, TCP Group is one of the outstanding success stories in Thailand’s beverage industry. The company achieved total sales revenue of 44,221 million Baht in 2021. Starting as a conventional medicine production and distribution company in Thailand 66 years ago, TCP Group is now a leading food and beverage production company of Thailand, owning some of the most valuable energy drink brands of the world. The company plans to invest THB 12 billion (Thai baht) in its three-year business plan (2022-24) to expand business at home and abroad.
According to TCP’s chief executive, Saravoot Yoovidhya, in light of the pandemic, digital disruption, mounting international conflicts and inflationary pressure, which have tremendously affected business, society and the environment, the company revised its strategies to prepare for a volatile future and to create growth for the organisation. Under the three-year plan, TCP Group will launch ten new products under Kratingdaeng or Red Bull, both in Thailand and abroad.
Of TCP’s total budget of THB12 billion, more than 50 per cent will be used to set up its own energy drink factory in Sichuan, China, with a total capacity of 1.4 billion cans per year.
Beer
The beer industry is a major consumer of metal cans in Thailand. The market is dominated by producers such as ThaiBev, which produces Chang beer, and Boon Rawd Brewery, producer of Singha and Leo beer brands.
Non-alcoholic beverages
Thailand has registered steady growth (barring the Covid-hit years of 2020 and 2021) in the production and consumption of carbonated beverages, packaged juices and energy drinks.
Energy drinks emerged as one of the key sub-segments for beverage can producers, although this segment has been greatly affected by the Covid-19 pandemic over the past two years. According to market research data by Nielsen in 2021, the Thai energy drink market dipped 7.5 per cent during this period.
Source: Nielsen Company (Thailand) Limited
Image: Yogender Malik
Packaged foods
Packaged food has emerged as a significant consumer of metal cans in Thailand during the past two decades. About 40 large, mid and small scale metal packaging producers cater to the needs of Thailand’s packaged food industry.
Thailand’s principal food exports include canned tuna, sugar, meat, cassava products, and canned pineapple. The country is the largest producer and exporter of canned pineapple.
According to a statement from the Thai Ministry of Industry (MOI), “In the first seven months of 2021, Thailand’s food export value was THB622.7 billion (US$18.6bn), a growth of 4.5 per cent year-on-year supported by increasing demand for our food products from major trading partners such as China, the United States, and the European Union.”
Major can packaging producers in Thailand
Thai Beverage Can Limited (TBC)
Thai Beverage Can Limited is among the largest beverage can producers in Thailand and ASEAN region. Established in 1997 as a joint venture between Ball Corporation and Standard Can Company Limited, the company operates four production lines to produce aluminium cans in ten different sizes and formats. In 2003, Berli Jucker Corporation joined this joint venture.
The company has a total of four production lines to manufacture cans of different sizes. The company also has four lid production lines for stay-on-tab, and large opening end lids, as well as one line for cutting and aluminium coating for lids. With the total manufacturing capacity of 3,400 million cans per year and the production capacity of 3,450 million lids per year in Thailand, the company is one of the largest aluminium can manufacturers in Southeast Asia.
TBC registered sales revenue of THB 5,049m in 2021. Domestic and foreign markets accounted for 88.3 per cent and 11.7 per cent of the total output share in 2021, respectively. The company’s major customers in Thailand are TC Pharmaceutical Industries Co, Quality Coffee Products Co, Beer Thai Public Company, Chaba Bangkok Co, and Carabao Tawandang Co. Major foreign customers include Lao Brewery, Hanil Can Company and F&N Beverages Manufacturing Malaysia.
Crown Holdings
Crown operates two beverage can production plants in Thailand; the company opened its beverage can plant in Nong Khae in 2013. The company started operations with an initial installed capacity of 500 million cans per year.
Crown also operates five metal food packaging production plants at Bangpoo, Hat Yai, Nakhon Pathom, Samrong, and Songkhla in Thailand.
Image: Yogender Malik
Toyo Seikan (Thailand) Company
Toyo Seikan operates two can production plants in Thailand. The Bangkok Can Manufacturing Company, located at Pathumthani, produces two-piece aluminium cans for the beverage industry, while Next Can Innovation Company located at Saraburi produces two-piece steel and aluminium cans.
Bangkok Can Manufacturing Co is a joint venture between Toyo Seikan, Crown Seal, Boon Rawd Brewery Co, Thai Namthip Co, Sermsuk, and Green Sport (Thailand) Co.
Asia Can Manufacturing Company
Asian Can Manufacturing Company is a relative newcomer in Thailand’s metal can industry. A subsidiary of energy drink producer, Carabao Group, the Asian Can Manufacturing Company started as a joint venture in 2017 with Japanese company, Showa Denko, to produce aluminium cans for the beverage segment.
Located in Bangpakong district, Chachoengsao, the company commenced commercial production in November 2018 through a single line (the company claims that it has sufficient space to accommodate two production lines at this site) with an installed capacity of one billion cans per year.
In 2021, Carabao Group purchased 26 per cent shares of Asia Can Manufacturing Company from Showa Denko Group for a consideration of THB 550 million, after an approval of the company’s board meeting on 19 February 2021.
- Yogender Malik is a New Delhi-based freelance writer on the Indian and South Asian industry and economy.
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