AllSBNews: 07/18/15

Saturday, July 18, 2015

The Irrawaddy Magazine

Heineken Brewer: ‘Quality is the Most Important Thing’

Posted: 17 Jul 2015 07:21 PM PDT

Lester Tan, managing director of Heineken's new brewery in Rangoon. (Photo: Tin Htet Paing / The Irrawaddy)

The world's third largest brewery, Heineken International, recently launched a US$60 million brewing facility in Hmawbi, near Rangoon, marking the Dutch company's comeback to the Burmese market economic sanctions forced its exit in 1996.

The new Burma brewery is operated by a joint-venture called APB Alliance Brewery, between local Alliance Brewery Co. (ABC) and Heineken's Asia Pacific Breweries. Dutch premium beer Heineken will be available in the market later this year, while its local brand—Regal Seven—will be distributed beginning in August. Heineken's local beverage, with a five percent alcohol content, is dedicated to the seven people who established the APB Alliance Brewery.

At a launch event earlier this week, The Irrawaddy spoke with the brewery's managing director, Lester Tan, about how Heineken might fare in Burma's battle of the beers, which has long been dominated by the locally loved Myanmar Beer, manufactured by the military-owned Myanmar Breweries. These days, however, it seems there's always room for one more drink as new brands like Tuborg and Yoma start springing up at local watering holes.

What attracted Heineken to invest in Burma?

Heineken was here previously, [but] because of international sanctions Heineken pulled out in 1996. When the sanctions were lifted four years ago, and the country opened up again, Heineken saw the opportunity to come back. Unfortunately, by that time, our previous brewery had another partner already. So Heineken had no choice but to open a new brewery.

The market is a very exciting one. It's a big market of over 50 million people. Young, many below the age of 35, and incomes are rising very fast. So as a consumer company, these are the truly big things that we are looking for. Big population, young population, growing incomes. The potential for this market is really big. It's a very rich country. That's why we are here.

Do you think that now is the right time for Heineken?

No, because we are doing it 20 years too late. We should have been here from the start. But it's never too late. So now is a good time. The country is opening up again, and we are happy to be here.

Myanmar Beer is consumed widely in this country. How do plan to court the market differently?

It depends on few things. One is our international quality. The quality, for us, is the most important thing. Not just the Heineken brand, but also our other brands, all are of perfect quality. We will not let any beer that doesn't pass our quality check enter the market. So that's number one.

The second thing is our brands. The brand itself is very important. A brand stands for many things. It stands for quality, it stands for reputation, it stands for image. We will have to build good brands, strong brands for the market here.

What about the price? Can you compete with local beers, or will your products be priced as premium?

For Heineken, we have prices for Heinekens all around the world. Heineken is never a cheap product. Therefore, it's always a bit higher. But for our local brand, we will try to be as competitive as we can with other local brands.

How many people are employed by the brewery?

At the moment, there are about 200 employees in the whole company. The factory has about 60. But there are also people that we work with indirectly. Our suppliers, right now we are talking about 50.

For example, at the canteen we provide food for our staff. We hired a company to cook food for our staff. We work with local companies. We want to work with them so that as our company grows they will grow together with us.

Let's talk about "Brew A Better World," Heineken's initiative promoting responsible water use and the sourcing of local ingredients. Can you tell us a bit more about it?

"Brew A Better World" is a very important part of the Heineken company's strategy all around the world. We really focus on safety. Everybody that steps into our brewery must attend a safety briefing, wear safety shoes, safety hats and safety vests. If you don't wear all these you can't come in.

The second pillar is growing with the community. For example, the caterer that I told you about; we work with all these small companies so that they can grow together with us.

The third one is sourcing. Local sustainable sourcing. Our local brand Regal Seven, the new brand, that product will use some rice. And we work with rice farmers to move them away from normal farming to sustainable farming with a contract, with us. We also work with the millers to work out transportation of rice to improve the quality. We do things like that.

Obviously, the next thing is water. We have a global target that for every liter of beer that we produce, we should only use about four liters of water. We haven't gotten there but that's our target. We need to slowly come down to four liters. For water there are two concerns. One is the water coming in and the other is wastewater going out. The wastewater to us is also very important because around the area of our factory is all paddy farmers. So we work together with the Myanmar Engineering Society and with the village hill-men, and we have one monitoring committee.

We have spent a lot of money to build a water treatment plant, and we also built a pipeline to discharge the water. We could have done an open drain and let it go, but for the sake of the community around us we have built a pipeline. So we will treat the water, and we will drain water into the river. We had an inspection from the YCDC three weeks ago. The wastewater being pumped to the river is clean. For us the environment is very, very important matter.

So you have to complete an ESIA?

Yes, we do. We have to meet all the standards. We arranged to use the global standard so Heineken's quality standards are not only for the beer but also for the water and wastewater. We work with the Myanmar Engineering Society… we send all of our samples to Poland. So every month our DHL bill is very high because we send beer, we send water, every month.

How do you promote responsible consumption of alcohol?

You will see messages on all of our bottles and cans. Under 18, please don't drink. If you drink, don't drive. But it's just a message. It's easy to say, we need to do also. We have worked together with the vice president and some of the big ministries, we ran a national road-safety campaign.

How might Burma's upcoming election impact investment in Burma?

I think political stability is a concern for all businesses around the world. Not just in Myanmar. There are many countries that people are worried about. And it doesn't need to be developing countries, developed markets are the same. Political risk is the same, it exists everywhere.

We always hope for the best. But we know that the government is a very progressive government. So hopefully if they will still be in power or whichever new government is in power, if they will remain progressive and investment-friendly, I believe that international investors can bring a lot to the country. And we will be happy to work together with this or the next government for the progress of the country.

The post Heineken Brewer: 'Quality is the Most Important Thing' appeared first on The Irrawaddy.

The Irrawaddy Business Roundup (July 18, 2015)

Posted: 17 Jul 2015 07:00 PM PDT

A Buddhist monk walks inside a mobile phone shop in Rangoon on Feb. 4, 2013. (Photo: Reuters / Soe Zeya Tun)

Burma Set to Sign Deal With Thailand, China on Controversial Salween Dam

A deal to build a massive hydropower dam in Shan State may be signed this year, according to a report, despite widespread opposition to the project, which is expected to provide only 10 percent of its power to Burma.

The plan to build the Mong Ton dam could be the first dam on the mainstream of the Salween River, also known as the Thanlwin. The dam's planned capacity of 7,000 megawatts means that a huge area of eastern Shan State would have to be flooded, displacing local inhabitants, to make way for the project.

Bangkok-based newspaper The Nation reported Wednesday that a memorandum of understanding would be signed between Burma, Thailand and China this year. The Electricity Generating Authority of Thailand and China's Three Gorges Corporation would jointly develop the dam over five years, The Nation said.

The newspaper cited Thai Energy Minister Narongchai Akrasanee saying that the Thai and Chinese state-owned firms would each hold a 40 percent stake in the project. The Burmese government would be left with a 20 percent stake, but could get just 10 percent of the power produced by the dam, it said.

"In the initial stage, about 700MW of power generation is expected and will be delivered to Myanmar, which still has a shortage of power supply," the report said.

"The remaining 6,300MW will later be sold back to Thailand under the Kingdom's plan to purchase power from neighboring countries, said the minister."

The site for the dam is close to areas controlled by the United Wa State Army and the Shan State Army-South. There is little industry to speak of in the area—known mainly for its annual crop of opium—raising concerns about how much Burmese people would benefit from the project.

Australian company Snowy Mountain Engineering Corporation (SMEC) has been enlisted to conduct public consultation on the proposed project. However, locals in the Shan State capital Taunggyi and elsewhere have held protests at public events relating to the dam.

Rangoon Stock Exchange Launch Pushed Back

The launch of Rangoon's new stock exchange will now be delayed until after the Nov. 8 general election, a senior official has told DPA.

Japanese firm Daiwa Securities and the Tokyo Stock Exchange have been helping the Burmese government to set up the exchange since 2012. A handful of local firms are thought to be hoping to list on the new exchange, including Tay Za's Asia Green Development Bank, Serge Pun's First Myanmar Investment and the Myanmar Agribusiness Public Corporation.

But this week, following confirmation of the election date in early November, the German news agency quoted Deputy Finance Minister Maung Maung Thein saying that it will launch later as "everyone will be busy with the election."

The minister did not give a specific date for the opening of the exchange, but said that the government was in fact almost ready to open it for trading. "Actually, we are almost getting ready for the launch [of the stock exchange], but we decided to postpone it as the election is more important for the country's democratic transition," he was quoted saying.

E-Visa Now Available for Business Visitors

People from 51 countries can now arrange a Burmese business visa online, the Ministry of Immigration and Population has announced.

In a note on its website, the ministry said that it would start accepting applications for the new business e-visa from the start of this month.

Travelers are required to submit online a passport-sized photo, a letter of invitation for a local company, and a copy of the company's business registration certificate, it said.

"The Online Business eVisa transaction fee is USD 70.00 and it is non-refundable," the note to prospective business visitors said. "Please make sure to submit the supporting documentations as they will be checked against the invited companies in Myanmar."

Business visitors using the e-visa must arrive in Burma at one of the country's three international airports, in Rangoon, Naypyidaw or Mandalay, and can stay in the country for 70 days.

E-visas are also available for tourists. The service is available to people holding passports of 51 countries, including China, Taiwan, the United States, Asean members and most European countries.

Vietnam's FPT Gets Permission to Launch Fixed Phone, Internet Services

A Vietnamese technology company has reportedly become the first foreign-owned business to be granted a license that will allow it to offer fixed-line phone and Internet services in Burma.

FPT Myanmar, part of Vietnamese corporation FPT Group, announced on its website that it had been granted the license for 15 years, effective from July 6. The Network Facilities Service-Individual license was granted by the Ministry of Communications and Information Technology.

"With this license, FPT is allowed to implement nationwide network infrastructure in Myanmar, creating a solid foundation for the development of Internet services here," the company said. "At the same time, FPT can provide fixed telecoms and Internet services and other value added services such as IPTV, e-News, e-Commerce, among many others."

While Ooredoo and Telenor have begun providing mobile phone and Internet services, the options for people looking for fixed Internet connections for their office or home are highly limited. Some potential customers in Rangoon have been told by the existing local operators that their township is already oversubscribed and that new connections are not available.

The Myanmar Times reported that FPT is the only foreign-owned company out of seven who now hold the license, citing information from the company itself.

FPT Myanmar's statement went on to say that Burma was one of the company's priorities as it looks to expand its presence outside of Vietnam.

"At the moment, globalization is the most important strategy of FPT, in which Myanmar is considered as one of the priority markets that the corporation has committed to long-term invest," the statement said. "FPT expects to bring technological advancements to contribute to the development of Myanmar's ICT industry as well as Myanmar's economy."

FPT said it is also investing in the Asia Pacific Gateway, a major project to lay a network of submarine cables that will connect China, Japan, South Korea, Taiwan and Southeast Asian countries including Thailand, Singapore, Malaysia and Vietnam.

Wireless Equipment Company in Joint Venture to Enter Burma

US company Aruba Networks has reportedly entered a joint venture with a distributor in Burma to begin selling its wireless equipment in the country.

According to a report carried by the website Deal Street Asia, the company, which is based in Sunnyvale, California, has joined with local company United Distribution Solutions Co. Ltd.

The report quoted Aruba Networks' managing director for Southeast Asia James Chia saying that the company was entering Burma as the adoption of mobile devices is "skyrocketing."

"There is a growing need by both public and private sector enterprises to better communicate and collaborate, and access information efficiently, and we are committed to help them take a wireless-first approach to connectivity," Chia was quoted saying.

Aruba Networks, which was acquired by computer giant HP in March, produces equipment for wireless LAN networks. The company's website says it aims to help companies keep up with a generation of people—which it dubs "GenMobile"—for whom smartphones are "now shaping their lives."

"Founded in 2002, we help businesses engage #GenMobile with exactly what they need, at exactly the right time, no matter what the device or location," the website says.

The post The Irrawaddy Business Roundup (July 18, 2015) appeared first on The Irrawaddy.

Saturday, July 18, 2015

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