12.10.05 Carlsberg Asia Strategy

Carlsberg Asia Strategy
Jesper B. Madsen
12 October 2005, Copenhagen
Agenda
Carlsberg Group
Carlsberg Vision in Asia
Asia Beer Market
Carlsberg Position in Asia
Carlsberg Strategy in Asia
A sip of Carlsberg
Owns an extensive portfolio of brands,
including the world’s fastest growing
international beer brand - Carlsberg
Is one of the largest brewing groups in
the world
Produce more than 100 million hectolitres
of beer in 2005
Has sales in over 140 markets
Produces beer, soft drinks and mineral
water in over 40 countries
Employs over 31,000 people worldwide
Over 150 years of high quality brewing
Carlsberg Organization
Executive Board
Exec. Vice President
Paul Bergqvist
CEO & President
Nils S. Andersen
CFO & Exec. Vice President
Jørn P. Jensen
Corporate Centre
Corporate Centre
• Global Sales & Marketing
• Supply Chain and Procurement
• Group Accounting
• Legal
• Business Controlling
• Corporate HR
• Communication
• Group IT
• Treasury & Risk Management
• M & A, Business Development
50%
Paul Bergqvist
Nils S. Andersen
Lars Fellman
Jesper B. Madsen
SVP
SVP
BBH
C. Ramm Schmidt
PB
Sweden
FIN
DK
N
PL
D
TR
UK
I
P
CH
Asia
Malawi
Export/License
Israel
Balkan
Carlsberg’s Position in Global League
2004
Million hl beer
1.
InterbrewAmbev
Belgium
234
2.
Anheuser-Busch
USA
159
3.
SABMiller
UK
138
4.
Heineken
Netherlands
109
5.
Carlsberg Breweries
Denmark
92
6.
Molsen/Coors
USA
60
7.
Scottish & Newcastle
UK
50
8.
Modelo
Mexico
40
9.
Kirin/Lion Nathan
Japan/NZ
36
China
34
10. Tsingtao
Volume vs. Market Presence
Inbev
Volume Million hl
180
Anheuser
Busch
150
SABMiller
120
Heineken
Carlsberg
Breweries
90
S&N
60
Kirin
30
Asahi
Coors
0
National
Foster`s
Guinness
Regional
Geographic presence
Global
Agenda
Carlsberg Group
Carlsberg Vision in Asia
Asia Beer Market
Carlsberg Position in Asia
Carlsberg Strategy in Asia
The Vision for Carlsberg in Asia
To make Carlsberg a leading brewery group and the
Carlsberg brand the leading international brand in
Asia – and make Asia the second growth engine for
the Carlsberg Group
Agenda
Carlsberg Group
Carlsberg Vision in Asia
Asia Beer Market
Carlsberg Position in Asia
Carlsberg Strategy in Asia
Asia Economic Development
GDP US$ bn
GDP Growth %
45000
6
40000
35000
5
30000
25000
Aisa
20000
15000
World
Europe
4
3
2
10000
5000
1
0
0
2000
2001
2002
2003
2004
Source: Region Report 2004, Global Insight – World Markets Research Centre
2000
2001
2002
2003
2004
Beer Growth Expected to Come from Asia and
Russia
2,000
1,800
2004
Million HL
2008
2015
1,600
1,400
1,200
1,000
800
600
400
200
0
Total
Growth Rate
1998-2003:
Africa
Americas
8.9%
4.8%
Europe ex.
Russia
2.0%
Russia
Other Asia
127.3%
9.7%
Source: Canadean 2003, 2015 extrapolated from 2008, with lower growth rate 2008-2015 for Russia and Eastern Europe
China
22.8%
Total
11.6%
Asian Beer Market
000 HL
Vol. 2003
Vol. 2003
per capita
Vol. 2009E
Europe ex. Russia
China
Japan
South Korea
Thailand
Philippines
Vietnam
India
Denmark
Taiwan
Malaysia
Hong Kong
Indonesia
Singapore
Laos
Cambodia
Sri Lanka
Myanmar
Nepal
Mongolia
410,014
255,626
65,817
17,722
14,500
12,438
9,969
6,725
5,200
5,111
1,443
1,501
1,478
691
682
490
536
222
242
205
63
20
52
37
22
16
12
1
97
23
6
21
1
16
12
3
3
1
1
8
435,668
328,365
61,884
18,663
22,000
13,591
14,191
8,521
5,300
5,500
1,624
1,544
1,367
807
995
730
570
296
268
197
25,654
72,739
-3,933
941
7,500
1,153
4,222
1,796
0,100
389
181
43
-111
116
313
240
34
74
26
-8
6.26
28.46
-5.97
5.31
51.72
9.27
43.35
26.71
1.92
7.61
12.54
2.86
-7.51
16.79
45.89
48.98
6.34
33.33
10.74
-3.90
Total Asia
404,079
11
494,190
90,111
22.30
Source: Canadean Global Beer Report: Consumption volume 2003
Growth, HL
2003-2009
Growth, %
2003-2009
Agenda
Carlsberg Group
Carlsberg Vision in Asia
Asia Beer Market
Carlsberg Position in Asia
Carlsberg Strategy in Asia
Carlsberg Position in Asia
-- Major
Major markets
markets
Five Brewery Groups
Position: No. 1 in all target
provinces in West China
CB share: CBG 99%, KMHS & Dali 100%
Lhasa 33%, 3 breweries Gansu 30%,
Qianghai 33%, Wusu 50%
Gorkha Brewery Pvt. Ltd.
Market share: 82%
Position: No. 1
CB share: 49.8%
Lion Brewery Ceylon Ltd.
Market Share: 82%
Position: 1
CB share: 17.35%
Carlsberg Brewery Malaysia Berhad
Market Share: 52%
Position: 1
CB Share: 51%
Carlsberg Singapore Pte. Ltd.
Market Share: 24%
Position: 2
100%
Hite Brewery Co. Ltd.
Market Share: 57%
Position: 1
CB share: 25%
South East Asia Brewery &
Hue Brewery Ltd.
Market share: 10%
Position:3
CB share: SEAB 60%, HBL 50%
MoU Signed with Hanoi Brewery
Carlsberg Hong Kong Ltd.
Market Share: 14%
Position: 2
CB share: 100%
Lao Brewery Company Ltd.
Market Share: 99%
Position: 1
CB share: 25%
Cambrew
Market Share: 45%
Position: 1
CB share: 50%
Carlsberg Position in Asia
Japan
North Korea
Mongolia
South Korea
China
Taiwan
Bhutan
Pakistan
Nepal
Myanmar
Bangladesh
India
Laos
Hong Kong
Vietnam
Cambodia
Thailand
Export
Licence
Malaysia
Sri Lanka
Singapore
Indonesia
Philippines
Top 10 Brewery Group in Asia
2003
2003
Brewery Group
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Tsingtao (Anheuser-Busch)
Asahi
China Resources (SABMiller)
Kirin
Yanjing
Carlsberg *
San Miguel
Harbin (A-B)
Golden Lion
InBev
* Based on 2005 Estimates
Source: Canadean Reports, and own estimates
Volume ‘000HL
32,961
31,663
27,628
23,993
22,221
19,946
14,181
11,824
10,714
10,682
Carlsberg Position in Asia
No major “Pan Asian” brewery group
Big brewery groups get most of the volume from home market
Carlsberg group is in the top in terms of “Pan Asian penetration”
Carlsberg subsidiaries / associates mostly in top positions
Strong presence in high growth markets
Carlsberg brand – a leading international premium brand in Asia in
terms of “Pan Asian penetration” – only challenged by Heineken
Carlsberg brand – very strong position in “new markets”, and with
excellent growth platform in other markets
Carlsberg Position in Asia
A
A Basket
Basket of
of Great
Great Local
Local Brands
Brands
Hite – leading beer brand in S. Korea
Jinro – leading liquor brand in S. Korea (largest in the world)
- Hite and Jinro: a strong combination
In China, 2 brands (Lhasa and Huanghe) out of only 5 “China Famous
Brand” for beer products
Angkor Beer – a potential “national treasure” in Cambodia
Beer Lao – already a “national treasure” in Laos – most famous brand in
Laos
Hanoi beer – leading beer brand in North Vietnam (MoU signed with
HABECO)
Huda beer – leading beer brand in Central Vietnam
Lion Beer, leading beer brand in Sri Lanka
And many other strong beer brands
Agenda
Carlsberg Group
Carlsberg Vision in Asia
Asia Beer Market
Carlsberg Position in Asia
Carlsberg Strategy in Asia
Carlsberg Strategy in Asia
Grow through
Growing existing operations
Acquisition / new business and strategic
alliances
Carlsberg Strategy in Asia
Growing Existing Operations
Asian subsidiaries /
associates / partners
Carlsberg Group
• Business foundation
• International
brand portfolio
• Strong local brands
• Grow existing business
• “Horizontal synergies”
• “Success spillover”
• Investments
• Defend positions
• Best practice and
know-how sharing
• “Success spillover”
Focus for Acquisition/New Business
and Strategic Alliance
China
Vietnam
India
Also opportunities in other markets
China
China Beer Market
World’s largest country – 1.3 billion people
World’s largest beer market – 285 mio hl in 2004
Annual growth estimated at 15 mio hl / year in average over
next five years (35 mio. hl growth in 2004!)
Hugely fragmented – top three groups only around 30%
market share
Very regionalized – no truly national brewery
Mainstream segment (local brands) accounts for more than
97% of total market
Carlsberg’s History in China
End 19th Cent. 1991
Export from Denmark and later from Hong Kong
1991
Carlsberg produced under licence at Huizhou Brewery in Guangdong
1994
Established JV Carlsberg Brewery Hong Kong Ltd. ( CBHK)with Swire
PacificLtd.
1995
Acquired Huizhou Brewery Co., Ltd. Æ Carlsberg Brewery Guangdong Co.
Ltd.
1996
Built green field brewery in Shanghai Songjiang
2000
Sold 75% of brewery in Shanghai to Tsingtao
2001
Closed the brewery in Hong Kong
2003
Swire Pacific Ltd. exited JV replaced by TCC
Acquired two breweries in Yunnan
2004
Invested in three brewery groups in West China
Launched Carlsberg Chill – aggressive Carlsberg brand strategy
2005
Increased shareholding in acquired breweries
Invested in one more brewery on West China
TCC exited CBHK
Carlsberg’s Vision in China
Become leading brewery group in West China –
and major brewery group in China
Make Carlsberg leading international premium
brand in China
Vietnam
Vietnam Beer Market
Big country, 81 mio people
Strong economic growth
Still “small” beer market – 10 mio hl, but big growth
potential – more than double over next 8 years
Fragmented – strong No.1 only 36% market share,
No.2 has 15%
Strong regionalization in North, Central and South
Big premium market – more than 1 mio hl
Carlsberg’s Strategy in Vietnam
Become leading brewery group in 15N° through
joint venture with HABECO – North Vietnam’s
leading brewery – and through strengthening
SEAB and HBL’s already strong positions in North
and Central
Make the Carlsberg a strong player in the premium
segment as part of a complete brand portfolio
India
India Beer Market
World’s second largest population – 1 billion
people – but only drinking 1 liter per capita
per year
Strong economic growth
Presently highly fragmented and regulated
– liberalization expected
Big growth potential for beer market
Carlsberg’s Strategy in India
Options
Options for
for Carlsberg
Carlsberg
Acquire major brewery group
Acquire smaller breweries
Building greenfield breweries
Carlsberg’s Strategy in Asia
Other
Other Opportunities
Opportunities
To increase our business in:
Thailand
The Philippines
Taiwan
… Just to mention a few
In Summary
Carlsberg’s Vision in Asia:
To make Carlsberg a leading brewery group and the Carlsberg brand the leading
international brand in Asia – and make Asia the second growth engine for the Carlsberg
Group
Carlsberg is well positioned to achieve this vision
Already strong position in many markets
Well-established in biggest growth markets (except India)
Carlsberg brand – well positioned in many markets, and strong growth opportunities in
others
Long history and big experience in operating in Asia
It may take time, but the foundation is there and the direction is clear.
THANK YOU!