SABECO strives to deliver superior product quality

Vietnam’s law changes on alcohol harm prevention and control in recent years have led to challenges for the beer industry. Furthermore, as people tighten their spending habits, consumer tastes and requirements for packaging design and quality have become more stringent, putting additional pressure on businesses to spend heavily on advertising campaigns in order to increase competitiveness and boost consumption.

Furthermore, high production and business costs for packaging, raw materials, and transportation have prevented a full recovery of the industry since the beginning of the decade. These costs are expected to continue to rise sharply, impacting profitability for businesses.

The Ministry of Finance’s proposal to adjust excise tax rates for harmful items, such as alcohol, in the latest draft of the Law on Excise Tax may add to the pressure on businesses, some brewers say. The Vietnam Beer-Alcohol-Beverage Association also believes that tax increases will raise the financial burden on businesses, so enterprises must have enough time to prepare and plan production. They are advised not to rush, shorten, or ignore requirements when amending and supplementing such an important tax law, the association said.

The team at SABECO is determined to evolve with the changing landscape in the market

Growth priorities

Admitting that the beer market is still difficult, Saigon Beer-Alcohol-Beverage Corporation (SABECO)’s general director Lester Tan at AGM last week that said that when setting growth goals, we cannot wait for “the wind to calm down and the rain to stop” but must respond.

Recognising the opportunities and challenges ahead, SABECO set a target of almost $1.4 billion in net revenues and $190 million in profit in 2024, an increase of 13 and 8 per cent, respectively, compared to 2023.

Koh Poh Tiong, chairman of the Board of Directors, said, “The Year of the Dragon holds a special significance to us all as it is a symbol of strength, courage, and resilience that reflects the character of SABECO as we navigate future uncertainties. We look forward to continued support on our growth journey to reach greater heights together,” he said at the company’s AGM last week.

The board will set sustainable growth goals to create tangible action for the long-term development of the corporation, including implementing resolutions of AGM and achieving the 2024 business plan.

SABECO will focus resources on branding and marketing activities, developing brand positioning, aiding production and distribution strategies to meet market needs, professional distribution network restructuring, and effective supporting channels and product segment control.

The corporation aims to maintain success in the domestic market and reach out to the international market; promote research and development initiatives to improve product quality; and enhance the capability and efficiency of its supply chain system.

It will also increase investment and operational efficiencies and reduce costs, thereby increasing productivity; focus on e-commerce according to changing trends; and adopt renewable and solar energy systems for cost-effectiveness and reducing the effects of climate change.

Lester Tan said that SABECO boasts a series of new programmes to solidify product quality offerings from brewery to bar.

“We want to ensure that our beers are as perfect in the hands of our consumers as when they are brewed with the passion of each of our brewmasters. With this dedication to quality, we want to deepen the connection with our current consumers while attracting new ones,” Tan said.

Commercially, SABECO has been putting greater focus on building stronger capabilities within our network of distributors to harness the potential of our vast coverage within Vietnam, in addition to starting new channels of distribution to evolve with the changing landscape in the market.

“All these changes are made so that regardless of changing market dynamics, Bia Saigon will stand to remain the number one beer brand in Vietnam,” Tan stated. “I look forward to a future filled with new opportunities, growth, and success.”

To attain the objectives for the year, SABECO is steadfast in reinforcing its three areas of focus: commercial excellence, supply chain efficiency, and environmental, social, and governance (ESG) criteria.

“We remain committed to delivering superior product quality, having aggressive commercial activities and a dedication to sustainability. These are the core principles that will drive our actions and decisions,” Tan explained.

Enhancing strategies

Corporate social responsibility is an indispensable component of SABECO’s core business operations, which will bring about benefits to the community, business partners, the government, non-governmental organisations, shareholders, and the corporation, Tan added.

Citizen’s rights will be integrated with social responsibility that aligns with the UN’s Sustainable Development Goals and the comprehensive strategy of SABECO, including the environmental policy, principles applicable to the supply chain, and the code of conduct applying to all business sectors of the corporation.

SABECO aims to become a global citizen company through contributions to the sustainable development of communities where it has business operations, as well as encourage the participation of the board, the management, and employees in community activities, charity programmes, and social activities or programmes sharing common objectives.

Regulations on managing, measuring, and supervising are constantly developing, while at the same time, the responsibility and awareness of the board, the management, and employees regarding the corporation’s commitments and actions for sustainable development are being boosted.

The balance between economic, environmental, and social factors is considered in making business decisions for SABECO, based on sustainable development principles.

In 2023, the company established its Nomination and Remuneration Committee and its Sustainability and Risk Management Committee, to support and ensure that all areas of operation and production follow the ESG objectives set by the group and Vietnam. Furthermore, the group installed rooftop solar power in nine of its breweries, in parallel with fostering the environmental impact control protocol and corporate social responsibility to generate positive socioeconomic values.

Strategically following these three key pillars has helped the company achieve outstanding recognition in 2023.

Its top brand, Bia Saigon, retains the leading position in the market. Effectiveness enhancement in production management has helped boost cost efficiency, and the Bia 333 line has won gold and silver medals from the Beverage Testing Institute.

Renewable energy adoption has also helped the corporation to reduce electricity usage to approximately 25 million kWh, equivalent to 18,000 tonnes of CO2 emission reduction.

ESG initiatives and corporate social responsibility have brought awards, such as Outstanding Enterprise for Employees, the Top 100 Sustainable Businesses in Vietnam, the Boards of Directors Committed to Corporate Governance Best Practices, and the Top 50 Best Listed Companies in Vietnam.

“By setting out to meet ESG targets, we are committed to acting beyond simply environmental stewardship but are also taking greater social and governance accountability,” Tan said. “We are aligned with Vietnam’s 2050 net-zero emissions targets while continuing to work with local communities throughout the nation to contribute to its socioeconomic development.”

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SABECO community initiatives continue to pick up the pace Through community programmes with deep impact, Saigon Beer-Alcohol-Beverage Corporation has reaffirmed its commitment to generating positive socioeconomic values in localities.

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SABECO outlines growth plans for 2024 Tan Teck Chuan Lester, general director of Saigon Beer – Alcohol – Beverage Corporation, gave the result and plans of the company at its AGM on April 25 in Ho Chi Minh City.