HEINEKEN signs joint venture agreement in Myanmar

Heineken N.V. (‘HEINEKEN’) today announced that it has entered into a local joint venture agreement with privately-owned Alliance Brewery Company Ltd (ABC) to brew and sell HEINEKEN beers in Myanmar. ABC is majority-owned by Aung Moe Kyaw, a local entrepreneur and established leader in the spirits industry. The new joint venture company, APB Alliance Brewery Company Limited, which will build a new greenfield brewery in the country, has been approved by the Myanmar Investment Committee (MIC).

Under the terms of the agreement, HEINEKEN, through its subsidiary Asia Pacific Breweries Limited, will have a controlling 57 percent stake in the new joint venture company and be responsible for overall management, providing brewing and technical expertise, procurement of ingredients and the licensing of brands.

The brewery will be located near the country’s capital Yangon and is expected to be operational by the end of 2014. The joint venture company plans to invest US$60 million in the brewery, create more than 400 jobs and brew leading brands, including Heineken®.

The new company will implement HEINEKEN’s global policies and approaches in relation to Employees and Human Rights, Supplier Code, local sourcing, water management, employee healthcare, community investment and responsible alcohol marketing.

HEINEKEN’s announcement follows the European Union Council decision on 22nd April 2013 to lift all sanctions, with the exception of the embargo on arms. It also reflects the recent international recognition by many countries of Myanmar’s progress in terms of both political and social reform and the decision of a number of global companies to announce plans to enter the country (1).

Jean-François van Boxmeer, HEINEKEN CEO and Chairman of the Executive Board said: “This is a truly exciting business opportunity that expands further our exposure to high growth markets. There is a growing recognition of the positive progress that Myanmar is making in terms of its political and social reforms. Through our investment, job creation and implementation of our global policies, I believe that we will support this process.”

Aung Moe Kyaw, Chairman, Alliance Brewery Company Ltd said: “We are excited by the prospect of working with a world class organisation such as HEINEKEN. We believe our knowledge and experience of the local market combined with the brewing and marketing know-how of HEINEKEN will deliver excellent products as well as attractive employment opportunities for the people of Myanmar.”

Reference

1. Companies that have recently announced plans to enter Myanmar include: PepsiCo (10th August 2012), The Coca-Cola Company (12th September 2012), Carlsberg (1st February 2013) and most recently Ford Motor Company (April 30th 2013).