Kirin to pump £660m into pharma pivot as beer profits ‘won’t grow forever’
Japanese brewing giant Kirin is looking to further pivot into healthcare and pharmaceutical space over the next three years, with a ¥100bn (£667m) investment.
The Covid-19 pandemic has launched the potential for pharma profits onto many businesses and investors’ radars over the past two years – and has reportedly accelerated many in Asia to drink less alcohol.
“If the beer segment would grow forever, it would have been better for us to focus on it, because making a challenge in a new business is very tough,” Kirin boss Yoshinori Isozaki told the Financial Times.
The brewer first made the jump into the healthcare sector in the 1980s and is looking to bolster this side of its business to keep its beer segment strong.
“We want to turn Kirin into a fermentation biotechnology company. We need to grow a new business while the beer segment is still healthy,” Isozaki added.
Isozaki added that the health sciences division is expected to bump revenues by ¥200bn (£1.3bn) by 2027, more than doubled what it secured in 2021.
One of the first steps in strengthening the division will be to expand its production of Citicoline, a memory improving supplement, by building a new manufacturing facility that will be up and running by 2023.
It follows controversy over its joint venture with military-controlled Myanmar Economic Holdings Public Company, as the country endured a devastating military coup which began at the beginning of last year.
The coup saw a string of companies bail out of the country following bloodshed, similar to what is occurring now in Europe amid Russia’s invasion of Ukraine.
However, Isozaki confirmed that Kirin would sell all of its shares in the venture by the end of June, after announcing its intention to withdraw from its military-linked partner in mid-February.