Sai Gon Beer seeks to become globally credible brand: general director

Tuesday, Apr 09, 2019 08:00

Mr Bennett Neo

The Sai Gon Beer Alcohol Beverage Corporation (Sabeco) is a leading brand name in the Vietnamese beer industry with over 140-year history of brewing. Viet Nam News's reporter Thu Ngan asks Bennett Neo, the companys general director, about business and brand development strategy since the companys acquisition nearly a year ago.

Could you tell us about your transformation from a State-owned company into a foreign-invested company since being acquired?

We took over the company in August and it has been good so far.

In terms of transformation, we recognized and decided we cannot do everything, only a selected number of things.

We divided the transformation into seven pillars: sales, marketing, supply chain, production, human resources, cost, and board.

For every pillar we have short-, medium- and long-term plans and we look at digital AI to try to help us develop these pillars.

For sales, we will leverage and improve our competencies, improve distributor quality and ensure price stability. We will ensure we differentiate brand positioning, adopt effective marketing initiatives and conduct brand health tracking.

For production, product quality, energy preservation and production cost saving are the most important. In the supply chain pillar, we will look for most efficient transportation and warehouse rationalisation and plan for and introduce supply chain 4.0 and other cost saving initiatives.

In terms of cost, we look at how we can further innovate on packaging without compromising quality and ensure we get the best prices for high-quality raw materials and look into administrative costs.

In human resources, we will strive for open and transparent management and more frequent communication with employees through various channels. We also have just implemented the new salary & reward structure, changing the salary structure to become more competitive to market and pay for performance.

The board will focus on the strategic and long-term direction of the corporation.

I can say things are going according to plan and the transformation needs a certain period of time to be completed.

We have started to see opportunities and have started projects. Some of the projects were rolled out last year, some will be rolled out this year.

So progressively we will see good initiatives being rolled out and deliver results.

With all these in place we are very sure that we will harness results.

When ThaiBev acquired Sabeco, many thought the over 140-year-old Vietnamese brand, Sabeco, will fall by the wayside. What do you think about this perception and how does the company plan to develop Sabeco globally?

Sabeco remains committed to responding to the needs of the local market and expanding our presence. We are also very much focused on preserving our proud Vietnamese heritage while introducing innovations and best practices that will help the brand become even more competitive.

If you pay US$5 billion to buy the company and the brand, and if you are in finance you know you need to do a PPA, you know that most of the goodwill you pay for is not for the assets.

The assets are a fraction of the total value you pay. The rest - the difference between the money you pay and the assets -- is mainly for the brand and distribution.

So, we paid so much for the brand, why destroy a brand? We obviously will continue to invest in the brand because we see that the brand can harness more value. So, we want to invest more, we will not destroy it.

So, I think personally the brand is slowly getting back on track.

We want to make Sabeco a credible brand to go global. To achieve that goal, the brand needs to be credible at home first.

First step is to make Bia Saigon the undisputed leading brand in Vietnam market. We need to invest in the brand, in communication, in packaging, in distribution, quality.. If the economy is not good, you should invest more so the brand becomes strong and people believe it is a credible brand and good quality beer. We will continue to invest in segmentation and packaging and so on.

Sabeco general director Bennett Neo and Vietnamese football team head coach Park Hang-seo at a cultural event. Sabeco aims to become a globally competitive beer brand in future. — VNS Photo Courtesy Sabeco

You have mentioned that investing in Việt Nam in general and especially in a State-owned company is “tough but can do”. Can you tell us more about that? What should the Vietnamese Government do to attract more investors?

Every day I wake up telling myself it’s a new day. If you come from a very structured country where everything works and is efficient - in Singapore everything has rules and is efficient, you come here, and you will be lost. It is not easy. Foreign companies that want to come here must have people with multinational experience and understand the way of doing things in those countries.

You have that and you have patience, and, I think, you understand you will succeed. If you have that mindset, prepare for issues, prepare to know that everything will be better in future, you can succeed. Every day I see negative things, but I see them positively, I see them as opportunities to improve. Every day to me is a new day, I start all over again. My senior colleagues all encourage each other. Basically, you must come with flexibility and see opportunities -- half full rather than half empty -- and then you can succeed.

I think there are a lot of rules that should be changed. I think everybody knows that tax is the biggest issue, not necessarily for me, but in general. Also, the complexity of relationships is a big issue. If the country can improve especially tax, if the Government can assist foreign enterprises more, you will be even better.

The country is embracing industry 4.0. What has your company done in terms of adopting modern technology?

If I look today, a lot of things are done manually, whether simple things like approving leave or travel. If you have a system, you will save a lot of people's time. Another example: in our supply chain today, we do scheduling of deliveries on paper. We invested in track and trace so that we can see every day which trucks go where.

We have information about the routing and so on, the problems, the history. With that we know what the best route and time is to deliver.

We are going to invest in a transport management system which will give us optimized routes and so less down time, shorter routes, cheaper delivery, more efficiency. We are investing in a warehouse management system, we can see where the products are, which came first, and where it is so that you save time and ensure freshness. We can see that it is very efficient, more transparent and faster. So, for all seven pillars we will have 4.0 in there. Besides processes and efficiencies, we are also looking at product innovation, maybe technology. In product innovation we are looking at robotics and so on, whether there are better ways to produce beer, deliver beer and so on. — VNS

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