Report of the Executive Board
Regional Review
continued
Singapore
Asia Pacific Breweries (Singapore) continues
to be the largest player in the market. Beer
volumes (including export) were up 7 per cent.
Tiger brand volumes were higher. We re-designed
the brand's logo and TigerLive, a multi-sensory
brand entertainment centre opened in
December. Heineken brand volumes were
stable. EBIT was slightly higher despite
an increase in marketing investments.
We launched APB's Archipelago Brewery range of
specialty beers in the market, including Traveller's
Wheat®, Straits Pale® and Trader's Ale®.
Malaysia
The Malaysian market was affected by yet another
year in which excise duty was increased, resulting
in weaker trading and lower volumes and causing
the total beer market to shrink by 8 per cent.
However, with higher marketing investments to
build stronger relationships, Guinness Anchor
Berhad's volume was down by 2 per cent.
China
In China, profit in the beer market continued to be
hurt by fierce competition, low selling prices and
high overcapacity levels. In terms of hectolitres,
China is the largest beer market in the world but in
terms of profit, this market continues to be
relatively small.
Heineken Asia Pacific Breweries China (HAPBC,
the APB vehicle managing the Chinese operation)
grew high single-digits and EBIT became positive,
helped by the improvement in Hainan and
Shanghai and the contribution by new associates.
Volume of the Heineken brand increased by 9.8
per cent. HAPBC operates 12 breweries in Hainan,
Shanghai, Guang Dong, Jiangsu and Tianji through
its subsidiaries and associates. Three more
breweries are under construction. Jiangsu
DaFuHao is in the process of building two more
breweries. APB's stake in Jiangsu DaFuHao in
China was increased from 40 to 49 per cent.
In 2006 several new beers were introduced
including Reeb Antarktik, Reeb Ice beer and Reeb
1841 Pilsner. The volume of the Reeb brand grew
by 6 per cent in Shanghai.
Vietnam
The growth of the profitable Vietnamese beer
market continued unabated. The Heineken brand
developed well and volumes were up by 20 per
cent, bringing the total Heineken volume in
Vietnam close to the 1 million hectolitre mark.
EBIT grew as a result of the better volumes
and an increase in price for Heineken in cans
implemented at the end of 2005.
Asia Pacific Breweries extended its market
coverage with the acquisition of Foster's
breweries in Danang in Central Vietnam and
in Tien Giang on the north of the Mekong Delta.
In January 2007, APB also acquired the assets
of Quang Nam Brewery in Central Vietnam.
The acquisition makes the company a strong
number-two player in the market with national
coverage. The deals also expanded our portfolio
in Vietnam with the brands Foster's® lager and
Biere Larue®, BGI®, Flag®, Song Han®, Larger®
and Larue®. These brands will help increase our
market share in the international premium and
national mainstream segment. During the year
we introduced locally-brewed Coors Light®,
completing our range of international
premium beers.
Thailand
The development of the beer market in Thailand
was hampered by stricter government rules
on the selling, distribution and advertising of
alcoholic beverages. Heineken continues to
be the beer of choice in the premium segment
despite the fact that the operating environment
in Thailand became more restrictive with new
regulations. Total volumes were up by 6 per cent
but EBIT was lower as a result of marketing
investments in building the Cheers® brand, the
new local mainstream brand introduced in 2005.
A A Heineken N.V.
Annual Report 2006
