COVID crisis won’t stop Japanese firms buying abroad: Suntory CEO

Suntory Holdings Ltd's President and CEO Takeshi Niinami speaks behind the company's alcoholic beverages during an interview with Reuters at the company headquarters in Tokyo, Japan, October 26, 2015. REUTERS/Toru Hanai

The chief executive of Japanese beverage maker Suntory Holdings said on Thursday the coronavirus crisis and other geopolitical risks would not deter his company or other Japanese firms from overseas acquisitions.

Shrinking demographics, low borrowing costs and years of slow economic growth have forced Japanese companies to turn to overseas acquisitions for growth. Suntory‘s $16 billion purchase of Kentucky bourbon maker Beam in 2014 is a prime example.

“A ‘post-pandemic’ world will eventually arrive, and considering the low cost of financing, if opportunities arise we’d want to pursue them,” Suntory CEO Takeshi Niinami said, although he said his firm had no immediate acquisition plans.

Suntory, which has annual sales of around 2.6 trillion yen ($25 billion), is one of the most familiar consumer companies in Japan, with brands including “The Premium Malt’s” beer, “Boss” canned coffee and “Yamazaki” whisky.

In addition to Jim Beam, it has acquired several Scotch whiskies such as Laphroaig and Bowmore, as well as soft drink brands such as Lucozade.

“There’s no growth if you’re only looking at domestic demand,” he said, adding that India, Southeast Asia and China were the most interesting markets for Suntory.

Niinami, an economic adviser to Japan’s government, said he hoped U.S. President-elect Joe Biden would rebuild multilateral relations and stabilise U.S. ties with major trading partners.

He was more cautious about the outlook for Japan’s domestic restaurant and bars, key customers for Suntory, saying conditions had worsened since June when he had said more than 20% of bars and restaurants could fail.

“I would say everyone’s understanding is that things are more severe compared with that time,” he said.

“Through December, January into February, we may see 20, 30% of these businesses close down,” he said. “The first quarter of next year is likely to be a very tough period.”

Japan’s capital of Tokyo raised its COVID-19 alert level on Thursday to the highest of four stages as the number of new cases spiked to a record daily high of 822.

Niinami said the availability of vaccines and virus tests would be crucial for restoring Japanese consumer confidence, and for successfully staging the Olympic Games in the summer.

“If the vaccine and other measures help to slow the spread of the coronavirus, and if we are able to hold the Olympics in August, that will mark a positive turnaround for the world, not just for Japan,” he said.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.