20:55 (GMT +7) - Tuesday 10/12/2019

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Sabeco restructuring for the future

Released at: 15:21, 10/09/2019 BUSINESS SPOTLIGHT

Sabeco restructuring for the future

The relaunch of Bia Saigon is a bold step which reflects the “daring” spirit of the Vietnamese beer company in its transformation journey and continued commitment to bring pride to Vietnam (Photo: Sabeco)

Leadership of brewer's General Director transforming and moving the company forward.

by Khanh Chi

Since the previous interview with Mr. Bennett Neo, SABECO’s General Director, four months ago – one of his first media engagements after spending six months “hidden in a cave” to restructure the brewer - he is now ready to share more about how he has transformed an enormous and complex company into a well-ordered organization ready for further growth.

“It has been a year now since I came in as SABECO’s General Director and, with the rest of the Board of Management, started to introduce enhancements and innovations,” Mr. Neo said. “Those efforts have been reflected in our second half performance, as many of these initiatives have already started to pay off.”

As part of this, he is continuing to transform the work and leadership culture at SABECO into one that combines deep local expertise, respect for Vietnamese culture and the brand’s own heritage, with openness to international best practices.

Achieving results

In terms of new approach to management, SABECO has recruited and appointed both local and global experts to key roles. Local experts contribute their deep understanding of local culture, company heritage, and strong local network; foreign experts, on the other hand, bring together their multi-market experience, global professional standards, and international working style.

Meanwhile, as part of its human resources (HR) initiatives, SABECO also introduced new performance-based salary structure. According to Mr. Neo, this will help better motivate employees to do outstanding work every day.”

“We strive to create a fair and competitive working environment for our people to thrive,” he said. “The new salary structure was benchmarked with the industry to ensure it is competitive. With this, we can retain existing employees as well as attract new talent.”

SABECO has also implemented several initiatives to improve productivity and business efficiencies throughout its operations. For instance, it introduced product packaging innovations such as the downgauging of cans and reducing the basic weight of cartons. In logistics, competitive bidding has been introduced for transportation, as well as a new control tower with a trucking track-and-trace system. SABECO has also begun to plan its own 4.0 digital transformation.

“We invested in a “track-and-trace” system so that we can see every day which trucks go where,” he explained. “We have information about routing and so on, the problems, and the history. With that, we know what the best route and time to deliver is.”

Mr. Neo added, “We also plan to invest in a transport management system that will give us optimized routes. This will mean less down time, shorter routes, cheaper delivery, and more efficiency. We are also investing in a warehouse management system, through which we can see where products are, which came in first, and where it is, so that we save time and ensure product freshness. We can see that it is very efficient, more transparent, and faster.”

SABECO’s financial performance in the first half of 2019 is the most convincing proof of the positive impact of the changes implemented over the past year and a half. First-half revenues reached VND18,424 billion ($801 million), an 8.5 percent year-on-year increase, while profit after tax was VND 2,820 billion ($122.6 million), a 15.2 per cent increase on-year.

One year after the comprehensive transformation, SABECO has continued to receive recognition from reputable organizations within and outside Vietnam. Some of the recent accolades it has received include being included in the Top 50 Most Effective Business Companies in Vietnam (by Nhip Cau Dau Tu Magazine) and Top 50 Listed Companies in Vietnam (by Forbes); ranking in the Top 3 of the List of Top 50 Vietnam Leading Brands (by Forbes); and its Bia Saigon brand being recognized as the most chosen beverage brand in rural areas (by Kantar).

Listed in Forbes Asia’s “The Best Over A Billion” List

Most recently, in recognition of its solid performance and the innovative initiatives introduced by its new leadership, SABECO has also been included in Forbes Asia’s latest listing of the 200 top-performing Asia-Pacific listed companies with revenues of above $1 billion – “The Best Over A Billion” List. Being Vietnam’s biggest brewer, SABECO joins the country’s largest corporations in the list as the leading F&B company that reflects Vietnam’s robust economic growth and increasing prosperity.         

It is worth noting that the prestigious list drafted by Forbes Asia is based on metrics such as profitability, revenue, debt-to-equity ratio, projected growth in the next one or two years, and some other five-year business performance metrics. In essence, it is not only a measure of how big or profitable a company is, but also an assessment of the business’ future growth capacity.

“We have spent the last year improving our operational efficiencies. This year, we look forward to strengthening as well as expanding our market share to preserve our leading position,” shared Mr. Neo about the company’s moving forward plans.

Short- and long-term vision

For now, SABECO’s main focus is the local market. Before stepping out of Vietnam, the company believes it must first be very strong locally. In line with this, it has been slowly building the profile of its flagship brand, Bia Saigon.

It recently introduced a new packaging design, which gave the Bia Saigon product line a refreshing, modern and progressive look. This kicked off the relaunch and over-all rejuvenation campaign for the Bia Saigon brand.

Another notable achievement was the gold medal won by Bia Saigon in the International Smallpack Lager Competition, Class 1 category, at the International Brewing Awards 2019. SABECO is the first brewery from Vietnam to have picked up the prestigious award, elevating Vietnam’s pride and the reputation of the brewing industry in the process.

“Currently, we are also looking at the other brands in our portfolio and planning similar initiatives to help them maintain their relevance and affinity among consumers,” he said. “We are able to do this because the initiatives we have introduced previously helped ensure that our operations has the sufficient foundation to support our long-term growth.”

When SABECO has further strengthened its foothold in Vietnam, and when it is ready to bring Bia Saigon to a wider global market, the company plans to identify strategic markets where it will make investments in brands and distribution.

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