SABECO ignites opportunities with streamlining overhaul

November 30, 2022 | 10:46
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Saigon Beer-Alcohol-Beverage Corporation is on track to further activate its transformation agenda that will strengthen its operational capabilities and modernise its governance system.
SABECO ignites opportunities with streamlining overhaul
SABECO’s Bennett Neo was part of the Vietnam M&A Forum last week

Bennett Neo, general director of the company (SABECO), said last week that the brewer has already started its second phase of transformation, aiming to further step up in its journey to enhance both its competitiveness and profitability.

Under phase 2, SABECO will focus on the key pillars of sales, brand/marketing, production, supply chain, people, and unlocking potential, supported by SABECO 4.0 and governance initiatives.

“We have plenty of potential in terms of processes, structure, and assets that we have not optimised yet,” Neo said. “If we can simplify processes, we could have better productivity, revenues, and cost reduction. Another example could be that SABECO can share services with its member companies, and there are numerous common activities that can be centralised.”

SABECO ignites opportunities with streamlining overhaul
"If we can simplify processes, we could have better productivity, revenues, and cost reduction."‑ Bennett Neo General director, SABECO

Launched in 2020, SABECO 4.0 is a strategic initiative to transform the business using digital technologies. This involves overhauling business processes and organisational structures, harnessing data, improving information flow to make better decisions, improving governance structures, and automating the business with digital technologies where possible. The end goal SABECO wants to achieve is to optimise, standardise, and automate the way of working across entities nationwide in order to strengthen its market leadership in the Vietnamese beer market.

In 2017, Thai Beverage through its subsidiary Vietnam Beverage acquired 53 per cent of SABECO, with the deal becoming one of the biggest of the decade.

“I think SABECO did suffer some initial pain in terms of the merger and acquisition process. But many people thought that we bought SABECO without due diligence, and I must say that it has been very hard for them to prove it,” Neo explained.

“I had to comb through everything, almost like carrying out a mini due diligence by myself, going through the whole company to see where the values are, what the biggest impacts are, down to the smallest factors. Then it was a case of seeing what we can do in the short term all the way to the long term and then matching them to a three-phase strategy.”

Neo stressed that people play an important role in SABECO’s journey, saying that it has been a significant challenge to guide about 13,000 people in the corporation’s ecosystem in a single direction with a new perspective.

“Furthermore, we require highly qualified employees in our company. In my experience, even if you have the best equipment and methods, you will fail if you don’t have the appropriate people,” he said.

Reaping sweet fruits

By the end of the official transformation, SABECO aims to become a professionally run and internationally respected corporation within the next 10 years or so.

International experience, meanwhile, will help to further elevate the company and meet global standards. This is brought to the company by Neo, whose vast global experience – especially in the beer industry – has allowed him to introduce innovations in the company’s operations, production capabilities, supply chain management, and sales and marketing approach.

SABECO has set a target revenue of $1.51 billion and profit after tax at around $199 million for the whole of 2022. According to its Q3 financial statement, the brewer recorded net revenues of $375.2 million, up 101.6 per cent over the same period last year. Meanwhile, profit after tax reached $60.4 million, up 195.5 per cent on-year.

For the first nine months of the year, SABECO reached net revenues of $1.08 million and profit after tax of $191.3 million, up 44 per cent and 75 per cent, respectively.

Net sales and profit after tax have been improved and were higher than last year as the country emerged from lockdown and consumer demand increased. In addition, during this time last year, social distancing measures and pandemic restrictions were tightened, especially in Ho Chi Minh City.

In 2022, SABECO also focused on market expansion both domestically and internationally. In addition to this, it will continue to build a stronger product portfolio in line with the trend of consumption, while continuing to restructure its distribution and route-to-market ecosystem.

Earlier this year, top brand Bia Saigon launched a special event to mark the rebirth of the legendary Bia Saigon Special with a new taste and packaging to reinforce the company’s long-term ambition to boost brand positioning and expand its market with creative and pioneering goods and services.

As a result, the brand has been recognised as a strong presence in the region. For example, the Asia Beer Championship 2022 honoured Bia Saigon for its outstanding beers and its innovation to meet customer needs.

Flagship brands Bia Saigon and Bia 333 have been consistently recognised for outstanding quality by prestigious local and international organisations, such as the Vietnam Value accolade, for several years. The company has also received a gold medal at the International Brewing Awards 2019, the Gold, Silver, and Bronze Prize at the International Beer Cup 2019; the Gold and Silver Medal at the Australia International Brewing Award 2020; and the Gold and Silver Medal at the Monde Selection Awards 2021.

With 147 years of brewing history, SABECO has established itself as one of Vietnam’s leading companies. It includes 26 breweries and 11 trading subsidiaries and has a distribution network of thousands of retailers nationwide. Its brands in Vietnam include Bia Lac Viet, Bia Saigon Chill, Bia 333, Bia Saigon Special, Bia Saigon Export, Bia Saigon Lager and Bia Saigon Gold.

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By Nguyen Thu

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