EFFECTIVE PARTNERSHIP KEY TO SUCCESS
Reported by Tan Thanh
December 9, 2016 marked the 25th anniversary of the establishment of HEINEKEN Vietnam Brewery (HVB). In celebration of the 25-year milestone of success, Ms. Le Minh Trang, Chairlady, Members Council of HVB, and Mr. Leo Evers, Managing Director of HVB, together granted an interview with The Saigon Times.
Mr. Leo Evers, Managing Director of HVB
The 25-year milestone is a good time to recall old stories. What were the expectations and goals when HEINEKEN first started out in Vietnam in 1991?
Mr. Leo Evers: I think there was definitely an initial vision of both HEINEKEN and the Vietnamese partner to make a great company, but honestly, I must say nobody could expect at that time that it would become such a big success as it is today.
We started negotiations in 1989, the joint venture was set up in 1991 and the first batches of beer came out in 1993. As Vietnam was embarking on the economic reform, opening its door to foreign investment, I think the shared vision for the time was definitely unique. At that time, HEINEKEN, the Vietnamese Government and SATRA all together built a solid foundation for today’s success, perhaps without knowing just how successful it would become.
What are the changes to SATRA the partnership with HEINEKEN has helped bring about?
Ms. Le Minh Trang: A quarter of a century has passed, and the biggest change the collaboration with HEINEKEN has afforded is the constant development of our joint venture. HVB initially had one brewery in District 12 (formerly Hoc Mon District) in late 1991, capable of producing 300,000 hectoliters per year. Now, HVB is Vietnam’s second-biggest brewer which operates five breweries with a wide portfolio of diverse and well-known global beer and cider brands. Moreover, those brands ensure the quality and satisfy domestic and foreign customer needs. It can be said that HVB is one of the most successful and longest-lasting partnerships in Vietnam.
What’s more, another significant change is the tremendous improvement of skills and knowledge of the local staff under the valuable guidance of experienced foreign experts. The localized training programs to upgrade local team expertise have reached considerable achievements. Until now, a significant number of local staff members have replaced foreign personnel in managerial positions. Meanwhile, HEINEKEN’s international training programs have trained and promoted local staff to higher regional posts in addition to supporting the training task in the whole system.
In your partnership with SATRA, what are the challenges you have had to overcome in order to reach today’s success?
Mr. Leo Evers: I think when two companies from different countries and continents work together, differences will emerge in culture, language, and ways of thinking. However, we have overcome those obstacles and the most important thing is mutual respect and trust. When we have mutual respect and trust, whatever the culture you are from and whatever the language you speak, those are the fundamentals for a really sound corporation. From 25 years ago to today, mutual respect and trust still exist between SATRA and HEINEKEN, I think it’s a very solid foundation for a business to prosper from.
Moreover, it wasn’t the case of one partner just opening the door for the other, I think we truly compliment each other, HEINEKEN brings in brewing experience, technology, HR development and prestigious brands while SATRA contributes local personnel, local know-how, regulatory knowledge, social environment and local network. This creates a nice balance between the two parties.
Some have maintained that the joint venture between HEINEKEN and SATRA is one of the first and most successful joint ventures in Vietnam. In your opinion, what are the factors leading to this success?
Mr. Leo Evers: We started out with a small brewery and 20 employees and today we have five breweries, 2,000 employees and a combined brewing capacity more than 30 times greater than what we started with. These figures say it all.
In addition to the mutual respect and trust between the two parties, I believe there are two more key factors to this success.
The first key factor is people. Our company was built by Vietnamese who are very hard-working. I’d like to say it again. We have 2,000 people today and only seven of them are foreigners. The second key factor is our brands. These include HEINEKEN, the most international premium beer in the world and Tiger which is the fastest-growing brew brand in Vietnam and in Asia. On top of this, we have Larue, a fabulous Vietnamese brand that is the oldest brand in Vietnam.
When we talk about people and brands, quality is really at the heart of everything we do, quality for the products, quality for the people and quality for our processes. So it’s about having the best people, best brands and the combination of these working together.
Ms. Le Minh Trang, Chairlady, Members Council of HVB
SATRA is multi-sectoral trade corporation which has many partners. Is the partnership between HEINEKEN and SATRA the most successful partnership for SATRA?
Ms. Le Minh Trang: A look at the development of HVB allows us to say that this is not only one of SATRA’s successful partnerships, but also one of the most successful joint ventures in the beer industry in Vietnam. During 25 years of collaboration, we have been developing sustainably and continuously in terms of production and business performances, as well as contribution to the improvement of Vietnam’s environment, society and economy. HVB is proudly one of the big tax-payers in HCMC and Vietnam in the foreign investment sector. Furthermore, HVB has always been committed to CSR activities since the early days through sustainably meaningful and impactful effects for the community.
In the middle of this year, Vietnam Brewery Limited Company (VBL) was renamed HEINEKEN Vietnam Brewery (HVB), leading to concerns that SATRA might divest from this joint venture. Could you please talk about SATRA’s plans?
Ms. Le Minh Trang: The objective of our name change is to fully unveil our international dimension and brewing expertise while our values of 25 years of success remain unchanged. Since the early days of collaboration in which we surmounted challenges to come to the present success, the relationship between HEINEKEN and SATRA has always been in harmony relying on equality, transparency and mutual respect. We will sustain this fruitful relationship to rise to any challenge to take HVB to new heights and deserve the efforts made by those who laid strong foundation for HVB.
How important is Vietnam to HEINEKEN in comparison with other markets in the world?
Mr. Leo Evers: At the moment, HVB is the second largest operating company in the HEINEKEN Group. That means Vietnam is a very important market for HEINEKEN. We are very positive about the future of Vietnam’s economy in general and the food and beverages industry in particular, so our future outlook for HEINEKEN in Vietnam is very bright.
Could you please let us know about HEINEKEN Vietnam Brewery’s strategy for maintaining its leading position in Vietnam’s beer market?
Mr. Leo Evers: Well, you can see that there is more and more competition in the market, both in Vietnam and across the globe. Our strategy is therefore to continue our focus on our current brands (and compliment these with a wide range of innovations introduced) as well as continue to invest in and develop our people. It is not just about what the business results are though, but also how we achieve those results.
We are very proud that one month ago, we were honored by the Vietnam Chamber of Commerce and Industry as the third most sustainable manufacturer in Vietnam, among more than 400 candidates. Apart from investments in people and brands, we will continue to pursue sustainable goals, because business and sustainability must go hand in hand. We genuinely believe that being a sustainable business gives us a competitive advantage as it reduces cost and Vietnamese consumers are more and more wanting to know that the companies they buy products from are good businesses operating in a sustainable way.
Together, we think our strong focus on our brands and our people, and always acting with a sustainable, long-term outlook, will hold us in good stead.
HEINEKEN Vietnam Brewery has a portfolio of outstanding brands, such as HEINEKEN, Tiger, Larue and Desperados. Do you have any plan to introduce new products or new brands to the Vietnamese consumer?
Mr. Leo Evers: When we look back at Vietnam’s beer market three years ago, it was quite static. We noticed that Vietnamese consumers wanted more choices, and they wanted different beers with different taste profiles. We thus started to introduce new products to the market, such as Desperados, the beer with Tequila flavor. We also launched Affligem, the high quality “abbey” beer from Belgium. And earlier this year, we brought in Strongbow, the famous cider brand, into Vietnam. You can see a lot of ciders coming from abroad have high prices, which are not very accessible for Vietnamese consumers. Our Strongbow is different, we introduced it at a reasonable price to make it accessible for Vietnamese consumers.
As I have already mentioned, the way forward for us is to continue to innovate and continue to surprise our consumers with new products, new brands. We are lucky that there are around 250 beer and cider brands in the HEINEKEN global portfolio, so we have access to many world—class beers and ciders that we can bring to Vietnam if we believe they will succeed here.
We also talk about innovations in a broader sense as well, taking into account production, operations and technology. Innovations in production, such as the use of renewable biomass energy to brew our beer, have resulted in lower cost energy and lower carbon emissions.
So, yes, watch this space for more product and company innovation to come.