SHAH ALAM: With a considerable yet well researched investment of RM343mil over the last three years to transform its brewery, Carlsberg Brewery Malaysia Bhd
(Carlsberg Malaysia) is certainly looking to kill three birds with one stone.
Of the RM343mil, RM200mil capex investment was used to upgrade its canning and bottling lines as well as its high-precision filtration systems.
Long-term resilience
Sitting down with StarBiz last month, the group’s managing director Stefano Clini cuts straight to the chase by highlighting that the country’s leading beer producer is aiming to future proof its business, besides optimising its environment, social and governance (ESG) efforts while making the workplace conducive for employees.
Although recognising that it is difficult at this juncture to nail down precise prediction figures on profitability and return on investment, he said: “Of course we are always looking to bring value for our shareholders in the long term.
“Our capital investment into our brewery is so that we keep a healthy growth rate while maintaining the creation value for the next 20 years or more.”
Clini: “We prefer to focus on the long term and that is how as a global group, Carlsberg has thrived for 177 years.”
Glancing at its profitability numbers, Clini said the company certainly is not resting on its laurels.
It is no secret that the group had charted a record net profit of RM333.2mil last year, and things are looking promising this year, with net profit up to September 2024 at RM258.3mil, already beating the same period of last year by 3.6%.
“We prefer to focus on the long term and that is how as a global group, Carlsberg has thrived for 177 years.”
Sustainable upgrades
Going forward, Clini revealed that the upgrades to Carlsberg Malaysia’s bottling facility from two mid-speed lines to one high speed line have resulted in a 33% improvement to its production capacity, reducing water and heat usage by 14% and 21% respectively.
“Not only that, our new lines and equipment are also more flexible technically and will allow us to innovate quicker, especially in terms of packaging formats,” he said.
Besides catering better for the expected increase in demand, especially with the Chinese New Year festive period being earlier in January 2025, he pointed out that on top of being more efficient and consuming less resources, the production lines also require less personnel attention.
(From left) Clini with Investment, Trade and Industry (Miti) deputy minister Liew Chin Tong with Her Excellency Danish Ambassador to Malaysia Kirstine Berner.
As if by design, despite Clini’s assurance that this is not a coincidence, Carlsberg Malaysia’s upgrades to its canning line and beer filtration facility have likewise also improved production capacity by 33% respectively, before commenting that the canning amenity is now consuming 42% less water and 47% less heat.
At the same time, the filtration plant has reduced water consumption by 18%, while notably cutting heat usage completely.Meanwhile, acknowledging that less manual personnel are required to man the state-of-the-art production lines, Clini pledged that Carlsberg Malaysia has no plans to downsize its production employees.
“Like other companies, we too have our own natural manpower attrition and retirements, but we see our upgrades and increased productivity as an opportunity to upskill our employees.
“This means there will be less manual labour, and there will be more conceptual work for our people in terms of planning, future projects and value added work,” he explained.
Engaging the workforce
Clini mentioned that the practice of upskilling in Carlsberg Malaysia is not new, with every employee in the company being mandated to undergo 20 hours of training, including himself.
Of interest, he said the group is moving in tandem with the Madani government’s implementation of minimal and progressive wages, as it balances the need to link higher wages to improved productivity and the move up the value chain of its human resources.
Notably, the managing director is anticipating no major impact from the government’s minimum wage hike to its profitability, before emphasising that he is supportive of the government’s increase of minimum wage.
“Our employees are already paid above the new threshold anyway, so consequently, the rise in the company’s direct labour costs will be minimal,” Clini remarked.
Beyond net zero
Perhaps most crucially to the company, Clini noted that the transformation of its brewery is in line with its “Together Towards ZERO and Beyond” initiative, boosting Carlsberg Malaysia’s confidence in achieving zero carbon emissions at its brewery, and a 30% reduction in value chain carbon emissions all by 2030.
In fact, he said the ongoing moves have produced the collective belief in the company that the aforementioned goals can be achieved before the targeted timeline.
Looking ahead, Clini said prospects for Carlsberg Malaysia, at least for the medium term, is positive, bolstered by Malaysia’s economic growth, although he acknowledged consumer sentiment could still see some improvement as it could be influenced by external factors.“But I am confident it will turn around,” he said.
He also reiterated his belief that the group will be able to handle the rationalisation of diesel subsidies effectively, without resorting to price increases to offset increasing costs, which is no doubt music to the ears of its many customers.
He emphasised that instead of raising prices, the group has discovered several alternatives to protect its profitability, including optimising its costs, promotions, usage of resources and premiumising its business.
