vinay mathur heineken asia pacific
TRANSCRIPT
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SOCIAL NETWORKING SINCE 1864
HEINEKEN Asia Pacific
The Heineken Experience 6th June 2016
Confidential | HEINEKEN TIMOR S.A 2
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HEINEKEN | Truly Global Presence
~170 plants in 80 countries
~90,000 employees
HEINEKEN Asia Pacific | One of the widest footprint across Asia Pacific 26 + 19 (India) plants in 16 countries
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China (2)
Vietnam (5)
Mongolia (2)
New Zealand (4)
New Caledonia
Indonesia (2)
Solomon Islands
Papua New Guinea (2)
Lae
Malaysia
Papua New Guinea
Cambodia
Vietnam
China
India
Sri Lanka
Thailand
Mongolia
Laos
New Zealand
New Caledonia
Indonesia
Solomon Islands
Australia
Sri Lanka
Laos
Thailand
Cambodia
Malaysia
Singapore
Myanmar
Myanmar (1)
India (19)
Countries with Plants Countries with Sales Offices
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Approval Process
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Dec’13
Initial discussion
with Vice PM on proposal
Detailed discussion with
MoF on proposal & Biz Model
MoF takes proposal to CoM, but
turned away
Mar’14
Discussions with various Ministries
Jun’14
Discussions with MoF
Start SIA process with
SEAPARI
Jul’14
Engage a local lawyer
Proposal & SIA draft
finalized with SEAPARI
Sept14
Inter ministerial meetings with Directors & Ministers
Approval Process (Contd..)
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Nov’14
CoM approval SIA signing with SoS SEAPARI
Land lease signing with Minister of
Justice
Jan’15
Preparations for signing SIA
Jun’15
Obtaining land clearances
Project commencement
Sep’15
Finalize suppliers & contractors
Commence local
production
Dec16
Project progress
What attracted us to Timor Leste 2
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5F
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Significant & well managed Petroleum Fund (USD billion)
Source: Govt reports/forecasts from ANZ Bank
Infra investments driving non oil GDP, albeit of a low base
Head room to grow beverage consumption
Low per capita
♦ No local production
♦ Beer & CSDs ‘traded’ not
‘distributed’ – wholesale
channel mix >70%
♦ Non exclusive Route to
Market - combined with
other goods
♦ Dumping ground for
parallels
Reasons
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Timor Leste PNG Solomon Philippines
Beer per caps (Ltrs)
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Timor Leste Philippines
CSD per caps (Ltrs)
If anyone can make it happen…it is HEINEKEN
Our beer brands have a leadership position in TL
SIA with the Government under the Private Investment Law
- Lower excise
- Import protection
- Land lease from the
Government
- Import duty exemption
for project capex
Why Soft Drinks?
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Beer @7/ltrs per caps
Beer @11/ltrs per caps
CAPACITY 30m liters
BREAK EVEN 15m liters
USD 32m
Million Liters
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Soft Drinks+Water
(no import protection)
CAPACITY 55m liters
BREAK EVEN 20m liters
USD 38m
Soft Drinks+Water
(import protection)
We are close to finalizing a Soft Drinks franchise
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List of key milestones – Commercial production from Dec 2016
Apr-15 May-16 Jun-16 Jul-16 Aug-16 Sep-16
Milestones •100% piling completion • Start shipment of PEB
•100% foundation completion •Shipment of tanks, pipeworks & fittings •Start shipment of utilities equipment •Start PEB installation
•100% PEB completion (frame and roof) •Start installation of tanks •Start utilities installation •Shipment of BH, tanks & fittings
•60% PEB completion (wall) •Start BH installation
•Shipment of can line, PET line, tanks & fittings
•100% PEB completion (wall) •Start can line installation
•Start PET line installation
HTSA Org Status
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And around 300 Indirect employees (distributors, transporters, project workers, brand ambassadors, stockists, other service
providers)
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70 (4%) customers made up 80% of sales
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100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
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412
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51
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91
56
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31
701
77
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41
911
98
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,051
1,1
211
,191
1,2
611
,331
1,4
011
,471
1,5
411
,611
1,6
811
,751
1,8
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# cases
# of customers
Total universe is 2,500 Active customers Jan’15 – Jan’16 is 1,900 In May’16 active customers 700
80%
Distribution update
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♦ Sales area is divided into 4 (four) areas: Dili, Central, West, East
♦ There are 25 stockists spread over the 12 districts
Lisun warehouse
Dili: 7 Lisun’s salesman for alcohol category Districts: 8 Lisun salesman for mix category
Dili: 4 Heineken’s salesman Districts: 3 Heineken’s salesman
Timor Food Safety Risk :
• No waiting room for truck driver, mixed FLT and walkways
• Improper stacking system
• Semi manual activities
• No Safety Sign
• No PPE (safety shoes and HV jacket) considering the FLT traffic
Recommendation :
• Waiting area for driver, separation walk ways and FLT
• PPE implementation
• Hand Gloves
• Safety Shoes
• Safety Sign and Poster
“Think Safety – Think Family”
• Install fire extinguisher put on easy to access area.
Sales team building in Bali
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Team building and motivation trip was held on 4-6 March 2016; attended by Heineken and the distribution (Lisun) salesforce
MBI Training for Brewery Staff
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35 personnel currently being trained at MBI in Brewing, Packaging,
Engineering and Utilities :
• 4 person from the 1st batch (Sept 2015) back in Dili.
• 30 people from 2nd batch trainee – January 2016
• 14 in MBI Tangerang and,
• 16 in MBI SampangAgung Surabaya.
• 3rd batch trainee on 1st of June 2016 Recruitment process has been
improved with conducting filtering for analytical and logical test.
MBI Training for Brewery Staff
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Monthly Training Evaluation :
• Process Knowledge and On the Job Training Assessment
MBI Training for Brewery Staff
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SAFETY FIRST – Safety Training by MBI Staff
LOTO training
Sustainability Initiatives to be developed in the following areas
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TECHNICAL TRAINING
WATER MANAGEMENT
RESPONSIBLE DRINKING
WOMEN ECONOMIC EMPOWERMENT
Specific CSR Initiatives underway
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WOMEN ECONOMIC EMPOWERMENT
Identified 5 recipients along-with the Secretary of State for Women Economic Empowerment
Building kiosks/push carts for the recipients, provide them credit from Lisun & direct delivery of Lisun products to their door step
Basic training in running the kiosk from HEINEKEN staff
COMMUNITY OUTREACH
Set up dumpsters on the approach road to Hera & other parts of Dili
- Working with Ministry of State Administration to refurbish 15 dumpsters & deploy
Working with the Ministry of Education to provide internet & tablets (teaching aid) to one/two school/s in Hera
Experience with Trade Invest
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SEAPARI
♦ Very professional
♦ Extremely responsive
♦ SoS full support, hands on
CoM approval
♦ Twice on agenda, but not discussed
♦ Last minute objections from MoF
Advisors; MoF unclear on how to
extend investment benefits to us –
SIA or legislation
♦ SEAPARI SoS & Vice PM pushed hard
to get approval
♦ Good local knowledge
♦ SIA draft simple yet
comprehensive
♦ HEINEKEN clear position
HEINEKEN lawyer
♦ Single window body should not
be changed so often
♦ This is the key gateway for
international investors & needs
to build investor trust
♦ Same for Investment Law
Our suggestion
Some learnings
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SIA does NOT replace Biz Registration License from SERVE, Investor
Certificate from AEI & Dividend Certificate from Tax Authorities
Work Permit process vague & tedious; SIA has in principle approval,
however actual process > 6 months
Limited awareness of SIA details within the Government – details to be
proactively shared. Strong commitment from Government on the SIA
Issues
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Parallel import of beers continue…..need a sustainable solution
HEINEKEN committed to responsible consumption…….however high
alcohol beers (>8% abv) continue to be permitted
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