Though Myanmar’s beer consumption is low at 6 litres per capita on a yearly basis, Heineken Myanmar sees it as a good opportunity for its expansion in Myanmar, according to managing director René Sánchez Valle.
Valle said in an interview that Myanmar is a dynamic and evolving market to be in, and the firm is optimistic about the future and continued growth.
“With a rising middle class and disposable incomes, combined with a thirst for exciting new products, there is potential growth for the future,” he said.
“For us, being present and building a strong business in Myanmar complements our regional strategy and presence in Asia. We are here to build a sustainable business. We are optimistic about the future and our position as a strong competitor in the market.”
According to Valle, the firm is willing to create strong foundations for sustainable growth. The underlying fundamentals are in place for continued growth of our business; urbanisation, a rising middle class, a young population, and a low per capita consumption of beer.
The firm brews locally an international premium brand Heineken, iconic Asian brand Tiger, regional stout brand ABC Extra Stout, and the local brand Regal Seven. Recently, it launched Regal Seven Extra and Tiger Crystal, the first beer in the market produced in a crystal clear flint bottle with slightly lower alcohol content at 4.5 per cent ABV.
“We want to keep pushing the boundaries with innovative products and brands like Tiger Crystal, which brings not only a lighter and refreshing taste to Myanmar consumers but also a distinctive packaging, and new draught experiences like Heineken Extra Cold, served at -1 degrees,” said Valle.
In mid-2015, the firm’s greenfield brewery in Myanmar became operational. Initially, US$60 million was invested in the highly-automated brewery located in Hmawbi township of Yangon region.
Last year, the firm invested a further $10 million in additional capacity, a wastewater treatment plant, a water discharge pipeline, and an onsite clinic that provides free treatment to its employees.
“Beyond capital investment, we have invested in our employees’ training and development. In 2015, all of our brewery staff went for an international training assignment in one of Heineken’s breweries in Asia Pacific. Furthermore, we invest in a series of long-term social responsibility programmes,” he said.
One of its CSR programmes includes “Making Myanmar’s Roads Safer” which has been implementing since 2016 in partnership with the transport and communication ministry. This year, the initiative focuses on drink driving, donating materials to the Road Safety Council and Police including breathalyzers, as well as running its social media channels.
The firm currently has 300 employees, and only 9 are expatriates. Eighty per cent of its employees are millennial_ they place a high value on learning and developing in an international organisation.
“We invest in our local teams, bringing international standards and training to brewing, marketing, sales and finance. We support our people to grow and find opportunities within the global network. Some of our talents are currently working on placements in Vietnam or have done leadership courses in Singapore,” he said.
Valle considers the high volume of illicit trade as the biggest challenge the firm faces in Myanmar. He estimates that around 30 per cent of all the beer in Myanmar is illegally smuggled, mainly through the Thai border.
“This makes competing fairly in the market challenging, since these products do not pay tax or contribute to the economy, and are therefore very cheap. This is a concern for both local and international companies and we work together with the government to support their efforts in the fight against illicit trade,” he said.