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S'porean brewery bubbling over with big plans
Publication Date : 26-08-2013
With the takeover by Dutch beer giant Heineken completed, Singaporean brewer Asia Pacific Breweries (APB) is now eyeing bubbling opportunities in regional markets, said the new head of APB's Singapore operations.
To meet expansion plans, the brewery in Jalan Ahmad Ibrahim will boost its capacity by 10 per cent over the next two months, and by 50 per cent within the next 18 months, said APB Singapore general manager Samson Wong, who took on the role four months ago.
The brewery makes beers like Heineken and Tiger, and APB is hoping to increase its exports to regional markets like Japan, South Korea, Taiwan and the Philippines.
Heineken and Singapore's Fraser and Neave (F&N) had run APB as a joint venture since 1931. But in July last year, Heineken dramatically moved to take over all of APB, after parties linked to Thai Beverage founder Charoen Sirivadhanabhakdi bought stakes in F&N and APB.
Heineken's takeover of APB was completed earlier this year and now that the drama is over, the work is on integrating Heineken and APB's operations - and of course expansion.
Wong says the leaner corporate structure after the takeover is opening the door for APB to expand its wings. A big hope is that the Singapore brewery will be able to export more beer to the region.
"Back then, Heineken was Heineken, APB was APB," said Wong, of the days when APB was run as a joint venture.
"The way things worked between the breweries, between one joint venture and another joint venture... there were difficulties in aligning supply and production agreements."
In June, Heineken announced that it will integrate its existing Singapore operations with APB's group headquarters here. The result is a new regional hub in Singapore for Heineken.
"Now it's all under one roof, we can look at the development and supply chain arrangements," said Wong. "That helps us to be more aggressive in expanding our business."
Among the target markets is Japan, which has traditionally imported its Heineken beer from the brewery in Amsterdam.
"The market in Japan may be looking for a more premium package of, let's say Heineken", and the Singapore brewery can meet this potential demand, said Wong.
Apart from being able to cut shipping time to Japan from Singapore compared with Europe, the Singapore brewery is also smaller and "more flexible" than its Amsterdam counterpart.
"We are able to satisfy smaller quantities and also more premium products."
Another aspect of growth is in expanding the reach of its brands, and APB plans to take Tiger Beer, a Singapore icon, to greater heights.
"Now, about 47 countries carry Tiger and we hope to grow further in Western Europe," said Wong. He plays down the chances of cannibalisation between Heineken and Tiger, noting that both brands have existed beside each other for decades and that each beer will attract different consumers.
"In fact, in one night, the same consumer can drink two different brands."
With Wong taking over the Singapore operations around the same time as the Heineken takeover, it may be natural to assume that he was put there because of the new ownership. But Wong said this was not the case.
"It's part of the regular rotation of people within the organisation," he said.
Before assuming his current role of overseeing the Singapore brewery and sales for the Singapore market, Wong was general manager of APB's Shanghai unit for four years.
The 42-year-old Hong Konger was previously the Taiwan country manager for the Red Bull energy drink, and had spent 14 years with Philippine brewer San Miguel in Hong Kong and mainland China.
He says that the integration of APB within Heineken is going on smoothly. "I don't see anyone at all telling me that integration is no good."
Staff turnover remains stable at a single-digit percentage, and is not high compared to other companies, he said.
One challenge will be re-aligning APB's financial year - which now runs from October to September - to follow the calendar year which is used by Heineken. The change will kick in next year.
"There's a lot of work, but we all know that after this, things will be simpler," Wong said.
APB Singapore is also focusing on corporate social responsibility, amid an international drive by Heineken towards environmental sustainability. The Singapore brewery now needs 4.3 litres of water to make one litre of beer, and the aim is to reduce it to 3.7 litres by 2020.
Last month, APB Singapore also pledged S$300,000 (US$234,503) over three years to the National University of Singapore, towards education in the field of water resources. The APB Singapore Water Education Fund will be used for community outreach, and research and community projects in conservation.
There are also the ongoing efforts to teach the public about responsible drinking, such as messages against underage drinking and drink-driving, and to promote moderate consumption.
"We know that our products can positively impact people through bringing them enjoyment, but they may also negatively affect people if used irresponsibly," said Wong.