Sapporo, known for its Yebisu and Sapporo beer brands, may build a new factory in the US to further tap North American demand, chief executive Takao Murakami told reporters in an interview.
Murakami also said he expects higher profits this year, as cost-cutting helps the company ride out the economic downturn.
The smallest of Japan’s major brewers, Sapporo has so far been overshadowed by rivals such as Kirin Holdings and Suntory Holdings in overseas expansion.
“We had sales volume of over 150,000 kilolitres in North America last year and we expect it to grow by more than 10 percent this year and next year,” Murakami said, adding that production has been moving near capacity.
“We will cope with (the production capacity shortfall) by expanding the amount of production we contract out this year, but eventually there will be an investment in a capacity increase,” he said.
Sapporo acquired Canada’s third-ranked brewer Sleeman in 2006 and also sells its Sapporo brand in North America.
Murakami said the firm is considering options to meet demand in the region, including a new plant in the US. Such an investment would likely be around 10bn yen ($109.8m), he said.
Sapporo is likely to have at least met its 12 bn yen operating profit estimate for calendar 2009, Murakami said. That would represent an 18 percent decline from the previous year.
“Given weak consumer spending and deflation, a fall in sales cannot be avoided, but as a result of our efforts to improve profitability we can surely achieve our profit target,” he said.
Japanese brewers are under increasing pressure as the home market has been in steady decline as the population ages and tastes change.
Kirin and Suntory have been in talks for several months on a merger that would create one of the world’s largest beverage and food firms on a par in revenue terms with US-based Kraft Foods and Pepsico.
In December, Sapporo said it would enter Vietnam by taking a 65 percent stake in a beer joint venture with Vietnam National Tobacco Corp to tap fast-growing demand.
“Currently, Vietnam’s beer market size is one-third that of Japan but it is likely to surpass Japan in about 15 years,” Murakami said. “It’s a big growth market.”
He also said the company wants to expand into neighbouring markets, such as Thailand and Malaysia.
