E-Malt.com News article: 3345

Denmark: Carlsberg A/S will aggressively expand its business in Asia, including acquiring breweries, to capitalise on the continent's fast-growing beer market. Carlsberg president and chief executive officer Nils S. Andersen pointed to China, India and the South-East Asian region as potential growth areas, The star mentioned on September 29.

“China will be the fastest growing market in the world in the next 10 to 20 years,” Andersen told StarBiz on the sidelines of Carlsberg's Asian Management Conference in Kuala Lumpur on September 28. About 50 top executives from Carlsberg's operations in the region attended the conference, the first of its kind in Asia. “We plan to invest in more Chinese beer companies and develop their own brands together with our Carlsberg brand,” Andersen said, adding that the company's aim was to make Carlsberg the leading brand in western China.

In a statement yesterday, Carlsberg said it had signed an agreement with Ongo Investment Pte Ltd and various minority shareholders to acquire 34.5% of Wusu Brewery in the Xinjiang Autonomous Region in north-west China. The brewery will be operated in joint venture with Blue Sword Group, a local company. About 7% of Carlsberg's global turnover comes from its Asian operations, 65% from Western Europe, and 25% from Eastern Europe. “We do not have a fixed target yet but hope that the Asian operations can contribute 25% of our global turnover in the next few years,” Andersen said. He said the Eastern Europe market took 12 years to take its contribution to 25% of the company's global turnover. “I will not say that Carlsberg's presence in Asia is small, but only in the proportion of its turnover compared with our European markets,” Andersen said. He said the annual average consumption of beer in China was about 20 litres per person, compared with 80 litres per person in Western Europe.

“This low level of beer consumption gives us good potential for growth,” he said. Andersen said competition in the beer business in China was not as fierce as in Europe. “Consumption of beer has reached saturation point in Europe. As such, it will not be easy for us to grow very fast there,” he said. Andersen said the Carlsberg brand had a long tradition in Asia and was well accepted. “Besides, the economic growth of Asia will create new demand for beer,” he said. Andersen also said Carlsberg was looking at penetrating India's beer market. “We already control 80% of Sri Lanka's beer market through our Carlsberg and Lion brands,” he said.

Carlsberg sold 81.4 million hectolitres of beer last year, up from 78.6 million hectolitres in 2002. The company is looking at 9% sales growth this year. Besides the Carlsberg brand the company also owns Tuborg, Baltika, Pripps Bla and Holsten. “We invest significantly in building our Carlsberg brand by supporting the European Soccer Cup, the World Skiing Champion and several golf championships,” he said.

Andersen said the company could compete against any other beer makers at the manufacturing level. “We are prepared to meet any legal competition. The only risk we see in our Malaysian operations comes from smuggled beer,” he said. He said smuggled beer constituted about 20% of the market in Malaysia. “Since we are the leading brand in Malaysia, smuggled beer has affected us,” he said.

Carlsberg brews beer in 90 locations in 45 countries. The group derives 94% of its beer sales outside Denmark. Carlsberg is 51% owned by Carlsberg Foundation, which is committed to the development of arts, culture and sciences. The foundation also operates Carlsberg's scientific centre, which conducts research into beer and beer making technology.



29 September, 2004