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Carlsberg re-enters Burma clutching plans for new 1m hectoliter brewery

By Ben Bouckley+

01-Feb-2013
Last updated the 01-Feb-2013 at 16:47 GMT

Picture Copyright: Carlsberg Group
Picture Copyright: Carlsberg Group

Carlsberg today formed a JV with a Burmese brewer to produce and market its brand portfolio, and told BeverageDaily.com the nation offered 'huge growth potential' in an under-penetrated beer category.

The Danish brewer will setup a joint venture with privately owned beverage concern, Myanmar Golden Star Breweries (MGS), and will own a 51% stake. 

Plans are being prepared to build a new greenfield brewery at an undisclosed location, but a Carlsberg spokesman told BeverageDaily.com would have a circa. 1m hectoliter capacity.

The spokesman said that the firm had partnered with MGS - a leading Burmese soft drinks player - around 20 years ago, to distribute the firm’s products, before the introduction of trade sanctions.

“It’s a sensible way for us to re-enter Myanmar with a local partner in whom we have confidence and that we can grow with,” he told this publication.

“I am sure our competitors are looking at the market too, because it offers huge growth potential, starting from a very low base in terms of consumption levels at the moment.”

Not a nation of beer drinkers, yet…

Beer consumption in Myanmar was currently only four liters per capita, the spokesman said, while national beer consumption was very low at 3.5m hectoliters.

“So in terms of consumption per capita with other countries around there, Vietnam is at 31 liters per capita, Thailand is at 26, Laos 32. So there’s good growth potential there,” he added.

“Myanmar has a large population of 60m,” the spokesman said, “while GDP per capita is growing at between 6-7% over the next few years, with a growing younger population of people in their 20s”.

Asked which brands Carlsberg might launch back into Myanmar, he said: “Historically, in these sort of countries we tend to have a combination of local brands and local power brands.

“But as we haven’t been there for 20 years, I can imagine that quite a lot of the brands will be your Carlsberg range of beers, etc. In the past few years, in China and places like that, we’ve just started to introduce Carlsberg and Tuborg, etc.”

Expanding Asian presence

Roy Baggattini, senior VP for Carlsberg Asia, said the company’s entry into Myanmar (Burma) was a “significant milestone” for the company that reinforced its regional expansion plans.

Carlsberg’s Asian volume exposure is currently fairly low at 18% of group volumes (12% of EBIT) compared to 42% exposure in Western Europe (49% EBIT) and 40% in Eastern Europe (39% EBIT).

But Indochina was an important growth region for Carlsberg, Baggattini said, noting its “leading positions” in Laos and Cambodia and a strong presence in Vietnam.

“In Thailand we have recently established a collaboration agreement with the leading brewery group, Singha Corporation. Our entry into Myanmar is a significant milestone for us and reinforces our ambitions to expand our presence in the region,” he added.

Thant Zin Tun, Vice Chairman of MGS Group of Companies said his company was delighted to be partnering with Carlsberg as a world-leading brewer.

“This collaboration provides us with the opportunity to play a key role in developing the beer category in Myanmar. As an industry leader, Carlsberg is bringing in its expertise, innovation and international standards,” he said.

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