Top Vietnamese brewer Sabeco names new general director

Vietnam’s top brewer Sabeco has announced the appointment of Lester Tan Teck Chuan as its new general director from October 1.

Lester Tan Teck Chuan, a Singaporean national with more than 25 years of experience in the industry, is currently senior vice president, chief beer business-Thailand for ThaiBev, which owns a 64% stake in Sabeco.

He will succeed Bennett Neo Gim Siong, who is set to complete his five-year term at the end of September.

Sabeco, listed on the Ho Chi Minh Stock Exchange (HoSE) as SAB, posted record profit after tax of VND5.5 trillion ($234.5 million) on net revenue of VND34.98 trillion ($1.49 billion) in 2022, up 40% and 32% year-on-year, respectively.

Sabeco said the achievement highlighted the corporation’s resilience and strength amid market difficulties during the post-pandemic period. The results also reflected Sabeco’s accomplishments in transforming its core business processes, improving cost management, and boosting operational efficiency.

Given the high profit, Sabeco announced a special dividend of 15%, raising the full-year dividend for 2022 to 50%. Shareholders at the AGM also approved a proposal on a bonus share issuance with a ratio of 1:1. Upon completion in line with approval from the State Securities Commission, SAB's chartered capital will double from VND6.41 trillion ($273.29 million) to VND12.83 trillion ($546.62 million).

In 2023, Sabeco has set a net revenue target of VND40.27 trillion ($1.72 million) and a post-tax profit goal of VND5.78 trillion ($246.2 million), up 15.1% and 5% year-on-year, respectively.

As part of its long-term plan, in 2023, Sabeco is looking to increase its ownership to a majority stake in Saigon Binh Tay Beer Group JSC, which has six beer plants and two packaging factories.

Sabeco has also been in the process of raising its ownership in the Western-Saigon Beer JSC from 51% to more than 70%. These moves will help Sabeco improve cost and operational efficiency and expand its product portfolio.

Sub-premium beer consumption will continue to grow, Sabeco highlighted. However, demand is shifting to lower segments due to incomes being impacted by the lingering Covid-19 pandemic, it said.

For 2023, Sabeco will focus its resources on branding and marketing activities, including developing strategies on brands, production, and distribution. The company will debut new drinks, and apply 4.0 technologies in its business and governance activities.

2023 could provide "golden" opportunities for Vietnam's beer industry thanks to the country's "golden" population and fast-growing incomes, with high potential for non-alcoholic beer and the export market.

Sabeco also highlighted some achievements in 2022, including the expansion of Saigon Beer-Quang Ngai Brewery's capacity to 250 million liters a year and the deployment of rooftop solar energy panels at nine plants in line with its sustainability commitments. In 2023, the brewer plans to install solar panels at a further seven factories, while increasing ownership in its subsidiaries.

2022 also marked an important milestone for Sabeco as its continued into Phase 2 of its transformation progress with six strategic pillars, namely sales, brand & marketing, production, supply chain, people, and unlocking SABECO 4.0 and governance. This progress will continue in 2023, said Bennett Neo Gim Siong.

Answering questions at the event, Bennett Neo Gim Siong affirmed Sabeco's market share in Vietnam has grown over the years amid fierce competitions from domestic rivals. The firm will continue its transformation progress into Phase 2 to boost its competitiveness, focusing on more aspects to meet international standards. He said he was confident Phase 2 would reap even more successes than Phase 1.

In addition to the mid-end segment, Sabeco will approach the sub-premium market itself or in collaboration with partners. Improvements to the distribution network and the production chain will help enhance product quality and competitiveness.

Michael Chye, a Sabeco board member, stated that amid challenges and instabilities from fierce competition, unpredictable developments, and impacts of the falling global economy, the brewer will keep investing to boost its long-term growth and benefit stakeholders, also a move to help Sabeco pay dividends in line with long-term and sustainable growth.

A day earlier, Sabeco announced its business results for the first quarter of this year. Its post-tax profit fell 19% year-on-year to VND1 trillion ($42.81 million) on a net revenue of VND6.21 trillion ($264.93 million), down 15% year-on-year. The brewer attributed the underperformance to low demand amid the global slowdown and high penalties for drunk driving.

Sabeco operates 26 breweries and 11 trading subsidiaries, while running a distribution network consisting of hundreds of thousands of retailers nationwide. Its most popular brands in Vietnam are Lac Viet, Saigon Chill, 333, Saigon Special, Saigon Export, Saigon Lager, and Saigon Gold.