Malaysia: Carlsberg to focus on local market and is going to launch new brands this year

Carlsberg Brewery Malaysia Bhd will focus on the domestic market by continuing to offer a well-rounded portfolio of products and brands, The Star published April 18.

Managing director Soren Holm Jensen said yesterday that Carlsberg would introduce new products under its existing brands and launch new brands this year. This was part of its strategic plan that used best practices in all areas from marketing and production to procurement.

Jensen said after the company AGM that Skol, its value-market beer, was relaunched last year and was expanding its market share.

“Skol has seen high double-digit growth in sales since and expanded its presence in the Green Label market.” he said.

Carlsberg has implemented the first stage of its strategic plan, which adopts best practices for its production.

The next step, Jensen said, would be to focus on commercial activities.

“The commercial excellence centre is based in Kuala Lumpur, while the centre for excellence for procurement is in Hong Kong, so there will be knowledge exchange between such offices as different teams travel around Asia to implement these best practices,” he said.

The company said sale of Malaysian duty-paid beer had declined in the past three years resulting from increased prices and increased duty.

This is expected to stabilise this year, though. “Another raise in duties will be detrimental to the whole industry”, Jensen said.

Malaysia imposes the highest duty on malt liquor in the world, after Norway.

While the malt liquor market already faced growing competition from wines and spirits, chairman Datuk Lim Say Chong said the majority of the alcoholic beverage market was still dominated by beer drinkers. The malt liquor demand in Malaysia, though, has declined by 8% in the past year, and Carlsberg’s production volume has also dropped by 8%.

As for overseas business, the company last year acquired 50% equity in Carlsberg Distributors Taiwan Ltd, and through this, plans to export beer to the potentially lucrative Taiwanese market. Taiwanese yearly consume five million hectolitres of beer, of which only 20% is imported beer. Lim also said the company was looking into opportunities to enter the Indian market, via a 24.6% equity investment in The Lion Brewery Ceylon Ltd in Sri Lanka.

Currently, Carlsberg only exports beer to the Maldives, Fiji and Singapore. Exports contribute about 10% of total group revenue.

For the year ended Dec 31, 2006, Carlsberg recorded a net profit of RM85.9mil on revenue of RM929.7mil. Earnings per share was 28.1 sen against 29 sen in 2005.

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