Regional review
''Growing our business and expanding
our portfolio, spearheaded by the
Heineken brand, underpin our
long-standing commitment to this
important region. I am confident that
we continue to grow and increase our
share of the Asia Pacific profit pool,
with the strategic benefit of our wide
geographical spread, our winning
portfolio and successful partnerships."
Vietnam
38 Report of the Executive Board
Siep Hiemstra
President Heineken Asia Pacific
Revenue
€597 million
EBIT
€100 million
EBIT (beia)
€100 million
Consolidated beer volume
7.4 million hectolitres
Heineken volume
3.9 million hectolitres
Consolidated beer volume
In millions of hectolitres
2003 I
2004 I
2005 I
2006 I
2007 I
6.0
6.4
In a large part of the region, Heineken operates
through Asia Pacific Breweries (APB), its joint
venture with Fraser and Neave.
Consolidated beer volume grew by over 1 million
hectolitres in 2007, driven largely by growth
in Vietnam, New Zealand and Cambodia as well
as the first-time consolidation of acquisitions
in Vietnam.
Consolidated beer volume as reported in the first
half of the year included 0.35 million hectolitres in
relation with the Chinese brewing group DaFuHao.
For the full-year 2007 DaFuHao is treated as an
associated company, the beer volumes of the first-
half of 2007 are excluded from the full-year number.
Volume of the Heineken brand grew 11 percent
to 3.9 million hectolitres, driven by strong growth
in Vietnam, Taiwan, South Korea, Malaysia, China
and New Zealand. Volume of the Heineken brand
was lower in Thailand where a weaker economy
and trade and advertising restrictions held back
growth. The Heineken brand extended its position
as the leading international premium beer in the
region. Tiger beer expanded its international
footprint further through the expansion of the
number of export markets and the start of local
production in Mongolia.
Heineken N.V. Annual Report 2007
39
Revenue grew by a robust 6.7 per cent and EBIT
beia) increased 5.5 per cent, driven by better
,'olume, strict cost control and a better sales
md price mix. Profit growth was held back by
he impact of weaker currencies against the euro,
ntegration costs of recently acquired breweries
ind gestation expenses related to the greenfield
oreweries in the region. In addition, profit in 2006
vas favourably affected by royalty restitutions.
Breweries are under construction in India
rid Laos, whilst the brewery in Mongolia was
:ompleted in 2007.
Profitability in the Asian beer markets varies widely country by
country. While China has a very low profitability, the countries of
Southeast Asia, such as Vietnam, offer attractive profit pools.
Vietnam is a fast-developing beer market, in which Asia Pacific
Breweries (APB) recently achieved a leading market position, driven
by acquisitions and an excellent organic growth rate.
The Vietnamese beer market is particularly attractive as a result
of significant increases in purchasing power and favourable
demographics. After five years of double-digit volume growth,
market volume reached a total of 18.0 million hectolitres in 2007,
with a per capita consumption of 20.9 litres. This is in line with
average consumption in the Asian region, but still far below the per
capita consumption level in Thailand (31.3 litres) and South Korea
(35.4 litres).
The sound economic conditions are expected to drive another
period of sustained growth in the Vietnamese beer market and
a compound average volume growth in excess of 7 per cent is
forecast for the period from 2007 to 2010.
APB's investments in Vietnam date back to 1993, when the first
brewery was constructed near Ho Chi Min City (in the southern
part of the country). In 2003, a second brewery was completedmJ
Hatay near Hanoi (in the north). In 2006, APB expanded its existuwfl
footprint in the region through the acquisition of the Foster's j
operations (two breweries) and the assets of the Qiiang
Nam Brewery. Today APB operates a total of five breweries
in the country.
APB brews, markets and distributes a portfolio of brands,
with a strong focus in the highly profitable premium segment, K
where it holds the undisputed leadership position with the Heinekêh
and Tiger brands. Other well-known brands are Bivina, Anchor M
Draft and Biere LaRue.
JS
Heineken N.V. Annual Report 20Q7