feature I
Location, location, location
Careful coordination
THE WORLD OF HEINEKEN
Tiger beer, ABC Stout and a local Laos brand will be brewed and marketed
at the new greenfield brewery.
Heineken's announcement of a joint-venture brewery in Tunisia in December
2006 is another example of this decision-making process. Heineken already
has a presence on the Tunisian market through its partnership with Mr Said
Boujbebel. Now, through the acquisition of a 49.99 per cent stake in Société
de Production et de Distribution des Boissons (SPDB), Heineken will be able
to develop a firmer footing and break into this fast-growing beer market.
"Tunisia is one of the highest per capita consumption beer markets in the
Middle East. In addition, Heineken brand awareness is high, despite a
virtually non-existent distribution network," says Guillaume Duverdier,
General Manager of SPDB. "We could also acquire an existing position.
However, greenfield projects require less investment and initial cash
contribution."
Once the decision for investment and construction has been made, the next
step is to select the ideal location for a greenfield brewery. Factors which
determine the suitability of a site include favourable logistics (easy access
to road and air transport) and the location's proximity to a reliable water
source. Heineken employs qualified water specialists and geologists to
undertake this process, who cooperate with local civil engineering
professionals.
"Over a nine month period, a total of 12 properties were considered before
we finally decided and purchased a site," says Heijlands in relation to the
Laos brewery. "We narrowed these 12 down to three, all of which provided
solid logistical advantages. Our final choice went to the property which had
an ideal source of water nearby."
Another example is the construction of a brand new Heineken brewery in
Seville, scheduled to be fully operational in 2008. While already having a
strong established presence in Spain for decades, the decision was made to
move the brewery site from the centre of Seville towards the city outskirts.
The new brewery will be larger, more modern and have greater brewing
capacity than the city's former facility.
"Seville is an interesting business case, as the sale of the land on which the
old brewery stood was highly profitable," says Marc Goumans, Financial
Manager Heineken Espana. "Proceeds could thus be used to invest in the
new facility. At the same time, the new brewery is located on the city's
outskirts, a better location for transport and logistics. All of this said, the
benefits of building our own new brewery were clear."
For every greenfield investment, a budget is calculated and allotted for the
entire process, from the development stages through to the realisation,
construction and operation of the brewery. The desired business target is
to establish the operation as efficiently and cost effectively as possible, in
as short a time as possible. In October 2005, Heineken announced its plans
to establish a new brewery site in Mongolia with its jointly owned business
APB. After only 18 months, the first batch of beer has already been bottled,
a remarkably quick turnaround under relatively difficult conditions.
