AEI Corporation has been reviewing potential diversification projects to enhance its growth and profitability in light of challenging operating conditions in its existing aluminum extrusion business that have emerged in recent years
CHICAGO and SINGAPORE, Feb. 19, 2021 – Natural Beverage Infusions LLC and AEI Corporation Ltd. (the “Group”) are pleased to announce that AEI’s subsidiary Ascent Bridge (Singapore) Pte. Ltd. recently launched Vrai Asia. The official launch event took place at the Ascent Bridge headquarters on January 29, 2021 in Singapore.
Vrai is the first and only United States Department of Agriculture (“USDA”) certified organic premium hard seltzer in the United States, and is 5.5% ABV. Made with premium organic vodka, Vrai’s unique taste features natural flavors with a blend of organic ingredients that appeal to health-conscious consumers. In recent years, the revolutionary Asian Ready-To-Drink (“RTD”) alcoholic beverage industry has been gaining popularity, especially among Gen Z, millennials and women. RTDs are steadily replacing mainstream-brand beers, a trend largely fueled by the region’s rising demand for healthier premium alcoholic cocktails over cheaper alternatives1.
The hard seltzer beverage market offers a promising outlook, with huge untapped potential. According to Jefferies’ analysis,2 sales of hard seltzer are expected to double to $3.5 billion in 2020 and reach $6.5 billion by 2024. In 2019, hard seltzer sales grew significantly by 226.4%, while total beer sales achieved a growth of less than 1%3.
With its relatively low calorie, low sugar and low carbohydrate content, the drink’s organic ingredients and its unique seltzer taste, as well as the convenience of drinking from a can and its approachable price point, Vrai is expected to become a major force in the market. It is also projected to gain significant market share in this relatively new product category by leveraging its first-to-market advantage in the Asian markets. By tapping into this growth, the Group is planning to launch Vrai across Asian markets, beginning with Singapore, followed by China, Hong Kong and Vietnam.
Diversification
Separately, AEI has been reviewing potential diversification projects to enhance its growth and profitability in light of challenging operating conditions in its existing aluminum extrusion business that have emerged in recent years. Subject to Shareholders’ approval, the acquisition of MTBL Global Pte. Ltd. (“MTBL”) presents an opportunity for the Group to acquire a business with global distribution rights (excluding mainland China) of a highly valuable liquor brand.
MTBL is involved in the distribution of alcoholic and non-alcoholic beverages and liquor, and investment holding, and owns the exclusive distributor rights to market and sell Moutai Bulao 125ml liquor products worldwide (except in mainland China) through the period ending on December 31, 2027 (“Distribution Rights”). Distribution Rights include Hong Kong, Macau and Taiwan. Moutai Bulao liquor is a single product launched on the market, produced by Guizhou Moutai Winery (Group) Health Wine Co., Ltd. (“GZMT”), a wholly owned subsidiary of the Moutai group in Guizhou, China. The Moutai group is one of the world’s largest distillers by market capitalization as of June 20194 and one of the world’s most valuable spirits brands5.
At present, China’s liquor production accounted for more than 40% of the world’s liquor production, and that percentage continues to increase. The output value of Chinese liquor in 2019 was nearly 1 trillion Yuan, while overseas sales volume (including Hong Kong, Taiwan and Macau) accounted for only a negligible amount. The penetration of Chinese liquor (Baijiu) in the overseas market is still in its infancy, which offers huge potential for growth and business opportunities. Since 2017, companies producing Moutai, Wuliangye, Yanghe, Luzhou Laojiao, Fenjiu, and others have accelerated their product promotion and marketing efforts in overseas markets. Among the “international” liquor enterprises, Moutai has the best performance, with an overseas sales revenue of 2.9 billion Yuan in 2019, accounting for only 3.4% of its total revenue, and comprising 65.0% of total liquor exports from China.
Subject to receiving all required approvals for the proposed acquisition of MTBL, the Group will work with Shenzhen Hive Box Technology Co., Ltd., a subsidiary of SF Express which is the largest logistics company in China, along with MTBL, to co-develop smart vending machines that will leverage IoT and digital networking infrastructure and serve as the main sales channel for liquor and other beverages. Each smart vending machine can store up to 93 bottles of liquor (125 ml). A smart vending machine will be placed in each of the Group’s partner restaurants. Sales through these vending machines is operationally efficient as it eliminates the need for the restaurants to employ a salesperson to promote the liquor. In addition, it is linked to an integrated digital network system, providing real-time access to the terminals’ customers in various phases of the transaction, as well as real-time updates of local sales data. This big data component can be used to complete shipping deployment and central order planning in various regions of the world, utilizing special software instructions.
Mr. Joe Q Sun, the Executive Director of AEI Corporation said, “We are delighted to have our first collaboration with MTBL in launching Vrai in Singapore which enables the Group to venture into the promising alcoholic beverage industry. Subject to obtaining the approval of the shareholders, we think that this is an opportune time for us to consider the recent proposed acquisition of MTBL, having identified the growth potential of the business of distributing baijiu in markets outside China. With the proposed acquisition, the Group is looking to expand its operations into more markets within the next five years. This launch marks a significant milestone in the Group’s entry into the alcoholic beverage industry as the Group aspires to transform Asia’s top-ranking beverage business sector.”
About AEI Corporation Ltd.
Established in 1983, AEI Corporation is a specialist manufacturer of high-quality precision aluminum extrusion products and precision metal components for a diverse range of high technology and value- added industries. With a reputable track record and a name synonymous with quality, AEI is a leading industry player in the Asia Pacific region for materials development. Today, it is the sole aluminum extruder with cutting-edge technology production facilities in Singapore. Its operations spans across diverse industries in Singapore, China, Malaysia.
About Vrai
Vrai is the first-and-only USDA Organic RTD Premium Hard Seltzer available in the market today. Made with a mixed assortment of premium spirits infused with natural flavors, Vrai’s portfolio of premium RTD alcoholic beverages delivers a taste experience that is unmatched by a cocktail bar. For more information, please visit: www.drinkvrai.com.
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