Soren Ravn, managing director of Carlsberg Brewery Malaysia Bhd, shares his views and outlook on the year ahead with The Edge Financial Daily in this interview.
TEFD: What are your expectations for 2012, for your company and your industry?
Ravn: Industry-wise, we are expecting the overall growth to be relatively flat at low single-digit growth. Nevertheless, the premium segment will continue to be the key growth driver as consumers become more sophisticated and are increasingly trading up for more premium selections and this segment will definitely be a key focus for us as a company in 2012.
We are aiming for favourable results in 2012 due to better product and channel mix. At the same time, efficiency improvements will remain one of the top priorities to optimise our cost structure and asset base in the midst of a weakening global environment — which is likely to insert pressure on cost of goods sold.
What impact, if any, do you expect from the euro crisis?
The European Union (EU) is Malaysia’s fourth largest export market after China, Singapore and Japan, accounting for 10.4% of total exports in the first eight months of 2011. The contribution of Europe-bound exports to overall export growth in 2011 was negligible and, in the event of a recession, the EU (situation) could very well turn into a drag.
With demand from the United States and EU accounting for nearly 20% of total exports and 16.4% of GDP, Malaysia looks relatively more exposed to weaker growth due to these two economies.
In addition, a recession in Europe may impact the Malaysian economy via slower inflows of foreign direct investments (FDI). In the first half of 2011, FDI from European countries totalled RM11.4 billion, marking Europe as the second largest foreign direct investor in Malaysia, and contributing around 22.8% of overall FDI.
Will Bank Negara Malaysia’s (BNM) recent tightening of consumer borrowing have an impact?
The need to cushion consumers from higher debt-servicing burdens is indeed a strongest argument for BNM to tighten consumer borrowing and maintain overnight policy rate at 3%. Private consumption growth may soften especially due to a reduction in credit card purchases.
We are of the opinion that these steps are necessary to ensure that the consumer credit situation does not get out of hand. Unbridled consumer credit was one of the contributing factors that impacted developed economies and the intention to rein this in is welcomed.
What are the company’s plans and focus for 2012?
We will continue to drive profitable growth with focus on our flagship brand — Carlsberg Green Label (CGL) as well as our extensive portfolio of other brands. It is important for us to provide our range of customers with a suite of brands that caters to their varying tastes and economic conditions.
As a result of the re-launch of Carlsberg brand and its bold new look and tagline — “That Calls for A Carlsberg” in 2011, we received exceptionally positive feedback and acceptance by our market segment. Carlsberg Green Label strengthened its position as the most preferred brand among all drinkers in Malaysia (one out of every two drinkers voted Carlsberg as their preferred brand based on the study by independent international research agency Millward Brown).
We expect 2012 to be another exciting year for our Carlsberg Green Label particularly due to the fact that Carlsberg is the official beer of Euro 2012.
We also see growing consumption from the younger segment, below the 30-year-old bracket, hence we will be increasing our efforts to engage with this market segment.
Our joint venture with subsidiary Luen Heng F&B Sdn Bhd in end-2007 (which helped us establish our presence in the premium segment with imported beer brands such as Hoegaarden, Erdinger and Stella Artois) has also played an important part in building our brand portfolio. Additionally, Kronenbourg 1664 & Blanc have reinforced our brand presence in this market segment which contributed to our growth in 2011.
We are excited about the Asahi Breweries Ltd deal to locally manufacture, sell and distribute Asahi Super Dry (the No 1 Japanese beer brand around the world). This marked another important milestone in Carlsberg Malaysia’s journey to becoming the nation’s most vibrant beer portfolio company.
Driving operating efficiencies will continue to be a priority as we look toward 2012. We have maintained our standards and freshness while ensuring efficiencies improve. Toward this end, we introduced and rolled out a new generation distributor model in 2011 where we aim to transform our traditional wholesalers to become trusted and strategic partners of Carlsberg Malaysia. This initiative will help us optimise our efficiencies in route-to-market while at the same time improve our customer service throughout the nation.
On our human capital front, we have increased employee engagements while streamlining our talent management and development programmes. These initiatives will be a key agenda next year as we look forward to drive growth and build a sustainable future.
One of our flagship corporate social responsibility projects themed Top 10 Charity Campaign celebrated its 25th anniversary in 2011. We have over the years accumulated a total school-building fund of RM370 million to date. Combining the contribution by all our education programmes, we have also raised more than RM400 million for the development of vernacular education in Malaysia. We have pledged to continue our support and contribution toward the development of education for both the Chinese and Indian communities.
What is your personal wish list for 2012?
Obviously, we would like Malaysian consumers to continue to enjoy their favourite beer without having to be taxed further. We are appreciative of the government’s efforts in not increasing duties under Budget 2012 as this will only have a negative impact on tourism and be an unnecessary burden to Malaysian consumers.
We also look forward to seeing the Malaysian economy continue to improve and this should be the case with all the transformational efforts being undertaken. Of course, implementation will be crucial toward this end.
This article appeared in The Edge Financial Daily, January 9, 2012.
TEFD: What are your expectations for 2012, for your company and your industry?
Ravn: Industry-wise, we are expecting the overall growth to be relatively flat at low single-digit growth. Nevertheless, the premium segment will continue to be the key growth driver as consumers become more sophisticated and are increasingly trading up for more premium selections and this segment will definitely be a key focus for us as a company in 2012.
We are aiming for favourable results in 2012 due to better product and channel mix. At the same time, efficiency improvements will remain one of the top priorities to optimise our cost structure and asset base in the midst of a weakening global environment — which is likely to insert pressure on cost of goods sold.
What impact, if any, do you expect from the euro crisis?
The European Union (EU) is Malaysia’s fourth largest export market after China, Singapore and Japan, accounting for 10.4% of total exports in the first eight months of 2011. The contribution of Europe-bound exports to overall export growth in 2011 was negligible and, in the event of a recession, the EU (situation) could very well turn into a drag.
With demand from the United States and EU accounting for nearly 20% of total exports and 16.4% of GDP, Malaysia looks relatively more exposed to weaker growth due to these two economies.
In addition, a recession in Europe may impact the Malaysian economy via slower inflows of foreign direct investments (FDI). In the first half of 2011, FDI from European countries totalled RM11.4 billion, marking Europe as the second largest foreign direct investor in Malaysia, and contributing around 22.8% of overall FDI.
Will Bank Negara Malaysia’s (BNM) recent tightening of consumer borrowing have an impact?
The need to cushion consumers from higher debt-servicing burdens is indeed a strongest argument for BNM to tighten consumer borrowing and maintain overnight policy rate at 3%. Private consumption growth may soften especially due to a reduction in credit card purchases.
We are of the opinion that these steps are necessary to ensure that the consumer credit situation does not get out of hand. Unbridled consumer credit was one of the contributing factors that impacted developed economies and the intention to rein this in is welcomed.
What are the company’s plans and focus for 2012?
We will continue to drive profitable growth with focus on our flagship brand — Carlsberg Green Label (CGL) as well as our extensive portfolio of other brands. It is important for us to provide our range of customers with a suite of brands that caters to their varying tastes and economic conditions.
As a result of the re-launch of Carlsberg brand and its bold new look and tagline — “That Calls for A Carlsberg” in 2011, we received exceptionally positive feedback and acceptance by our market segment. Carlsberg Green Label strengthened its position as the most preferred brand among all drinkers in Malaysia (one out of every two drinkers voted Carlsberg as their preferred brand based on the study by independent international research agency Millward Brown).
We expect 2012 to be another exciting year for our Carlsberg Green Label particularly due to the fact that Carlsberg is the official beer of Euro 2012.
We also see growing consumption from the younger segment, below the 30-year-old bracket, hence we will be increasing our efforts to engage with this market segment.
Our joint venture with subsidiary Luen Heng F&B Sdn Bhd in end-2007 (which helped us establish our presence in the premium segment with imported beer brands such as Hoegaarden, Erdinger and Stella Artois) has also played an important part in building our brand portfolio. Additionally, Kronenbourg 1664 & Blanc have reinforced our brand presence in this market segment which contributed to our growth in 2011.
We are excited about the Asahi Breweries Ltd deal to locally manufacture, sell and distribute Asahi Super Dry (the No 1 Japanese beer brand around the world). This marked another important milestone in Carlsberg Malaysia’s journey to becoming the nation’s most vibrant beer portfolio company.
Driving operating efficiencies will continue to be a priority as we look toward 2012. We have maintained our standards and freshness while ensuring efficiencies improve. Toward this end, we introduced and rolled out a new generation distributor model in 2011 where we aim to transform our traditional wholesalers to become trusted and strategic partners of Carlsberg Malaysia. This initiative will help us optimise our efficiencies in route-to-market while at the same time improve our customer service throughout the nation.
On our human capital front, we have increased employee engagements while streamlining our talent management and development programmes. These initiatives will be a key agenda next year as we look forward to drive growth and build a sustainable future.
One of our flagship corporate social responsibility projects themed Top 10 Charity Campaign celebrated its 25th anniversary in 2011. We have over the years accumulated a total school-building fund of RM370 million to date. Combining the contribution by all our education programmes, we have also raised more than RM400 million for the development of vernacular education in Malaysia. We have pledged to continue our support and contribution toward the development of education for both the Chinese and Indian communities.
What is your personal wish list for 2012?
Obviously, we would like Malaysian consumers to continue to enjoy their favourite beer without having to be taxed further. We are appreciative of the government’s efforts in not increasing duties under Budget 2012 as this will only have a negative impact on tourism and be an unnecessary burden to Malaysian consumers.
We also look forward to seeing the Malaysian economy continue to improve and this should be the case with all the transformational efforts being undertaken. Of course, implementation will be crucial toward this end.
This article appeared in The Edge Financial Daily, January 9, 2012.
