Guinness Anchor Bhd’s (GAB) products need no introduction to beer and stout lovers, with world-famous brand such as Tiger, Guinness, Heineken, Anchor, Kilkenny, Anglia shandy and Malta.

Established in Malaysia in 1964 and listed since 1965, the brewery company expanded in 1989 from the merger of Guinness Malaysia Bhd and Malayan Breweries (Malaya) Sdn Bhd. It operates the Sungai Way Brewery in Selangor, and is engaged in the production, packaging, marketing and distribution of beer and stout.

In the following email interview, managing director Charles Henry Ireland shares his views on the company’s business, strategies and growth outlook

TEFD: What are the group’s competitive strengths and advantages?
Ireland: GAB has achieved eight consecutive years of revenue, market share and profit growth. We have been able to achieve this through significant investments in the areas of “People, Brands and Performance”.

People
We have a strong and stable board of directors, management team and employee base. Approximately 15% of our workforce has been with us for over 10 years, 9% have been with us over 20 years, and 26% have been with us over 25 years.

We are committed to ensuring our employees have access to ongoing training, learning and development opportunities. In FY08, we increased our training and development budget by 25%, and in FY09, we increased it by a further 50%.

In giving weightage to areas management deemed important for developing and growing our people, the GAB “7 HR Pillars” were developed.

The “7 HR Pillars” was introduced to our employees to improve, empower, motivate and to reward them for great performance. The Pillars now serve as the foundation of HR’s services to our employees and are helping us focus on being the Employer of Choice.

Brands
GAB has the strongest portfolio of iconic, international premium brands. Tiger Beer is the No 1 Asian beer, Guinness is the world’s No 1 stout, and Heineken is the world’s No 1 international premium beer.

We work hard to ensure our brands have distinct positioning for different drinking occasions, appeal to different consumer groups and make significant investments in brand building.

Last year, 2009, marked the 250th anniversary of Guinness and we unveiled a host of activities in conjunction with the occasion, including Arthur’s Day, a celebration attended by 18,000 partygoers. It was a G250 consumer promotion hailed as the largest and most impactful in the last 30 years. We also had the Guinness Experiences global consumer contest.

We make significant investments in advertising and promotions, such as the Guinness promotions centred on St Patrick’s Day. We also continue to focus on music such as Heineken Green Room and our sponsorship of Rainforest Music Festival, and Heineken UEFA Champions League.

Performance
GAB’s performance comes on the back of successful implementation of systems and processes which have enhanced our productivity and our standing as a world-class brewery.

2009 marked the eight consecutive year in which we grew our market share, revenue and profit before tax. Our shareholders’ return on investment has recorded a compounded average growth rate of 14.1% over the last eight years. We continue to consolidate our position as clear market leader with a 57% share of the domestic malt liquor market and a 69% share of that industry’s profit pool as at June 30, 2009.

What have been the achievements of the group in the past four years (since 2006)?
In FY09, we grew market share from 56.2% to 57.1% and domestic volume by 5.2%. Our profit before interest and tax rose 14.3%. Our stock price increased by 16% during 2009 and total shareholder returns for the year was over 23%.

All of our main brands grew, including Tiger, Guinness, Heineken, Anchor and Kilkenny. Guinness Draught grew by over 48% during the year, while Guinness Draught’s volume has tripled in the last three years.

Guinness has won the Guinness League of Excellence for three consecutive years since 2006. This is the benchmark for excellent Guinness production standards by third party operations in the world, outside of Dublin, Ireland.

Tiger Beer has won the Tiger Quality Award as well as the Tiger In-Market Quality award for two consecutive years, in 2008 and 2009.

Other awards won by GAB include the 2009 Diageo Asia Pacific Market of the Year Award, Asia Responsible Entrepreneurship Award (AREA) 2009 in the Investment in People category, and AREA 2009 award in the Community Engagement category for Corporate Social Responsibility initiatives undertaken by the GAB Foundation.

What has been the group’s strategy for expansion? How have these strategies turned out? What are the group’s plans for the future, both short-term and long-term?

GAB is focused on Malaysia and plans to expand domestically in terms of market share. We will continue to focus on our strategy of “People, Brands and Performance”.

We will continue to invest in our trade partners, ensuring that they derive great benefits from working with us and convince the retail trade to make a shift to GAB. An example of such investment is our GAB Academy, a dedicated trade engagement programme designed to equip our food and beverage partners with creative business solutions, and product and customer service training.

We continue to invest in our people and are committed to creating a world-class organisation of highly motivated, well-trained and capable individuals operating as a team.

Finally, we invest heavily in our portfolio of premium international brands, particularly our four pillar brands — Tiger, Guinness, Heineken and Anchor.

We also continue to invest in portfolio development and innovation activities such as the new Tiger Beer variant, Tiger Crystal, and Guinness Premium Beer, which is currently being test-marketed. We have also introduced three imported brands — Sol Beer, Paulaner and Strongbow Cider. Although they will continue to be a small segment of the malt liquor market, they provide the market with a diverse portfolio of brands and meet the needs of our trade partners.

Eight successive years of growth in volume, revenue, profit and market share bear proof that our unwavering focus and strategic investment in “People, Brands and Performance” is paying off. We are on track for a ninth consecutive year of success in FY09/10.

How is the group positioning itself within your industry?
We are positioned as the clear market leader in the malt liquor market with our portfolio of premium international brands. For our employees, we aspire to be the Malaysian employer of choice and continue to invest in creating the best working environment to ensure we retain Malaysia’s best talent. For our shareholders, we offer superior shareholder returns.

How would you like to see the group in 10 years’ time?
Our long-term vision is for GAB to be an iconic Malaysian company, with a global reputation for world class performance delivery.

I see GAB continuing to offer excellent shareholder returns, in the form of 15 years of consistent dividend growth. I see GAB continuing to grow people, nurturing home-grown talent and exporting it worldwide, and I see continued growth in our brands. Finally, I see continued delivery of our Corporate Social Responsibility initiatives.

This article appeared in The Edge Financial Daily, November 30, 2010.