Bralirwa ready to take on competition - Sven Piederiet

Bralirwa S.A, Rwanda’s premier beverage manufacturer recently celebrated its Golden jubilee. Following the big celebration which was marked with glamour and vision, Bralirwa disclosed a number of new initiatives which will act as a platform for its next leg of journey. In an exclusive interview with The New Time’s Fred Oluoch-Ojiwah, Bralirwa Managing Director Sven Piederiet outlines the key pointers of his company’s future growth prospects. The Golden jubilee was a successful milestone for your company. What is the way forward now that the party is over? Piederiet: We are back to business. Returns to stakeholders and shareholders are of high importance and we are striving to improve these on a continuous basis. This will be done through achieving our clear mission and objectives. In achieving these, Bralirwa’s three values come to play. One is passion for quality while we continue bringing enjoyment for life to our consumer, clients and employees and lastly our endless commitment for respect for the people, society, and environment we live in. Lets talk about competition. Is Bralirwa ready to take on another beer producer locally for instance? Piederiet: We know for sure that there is indeed a new local competitor out there in the horizon. We are aware that this competitor has completed works for construction of its plant and that their launch is set for this year. We are thus adequately informed about such dynamics and we are ready for it. It is on top of everybody’s mind here at Bralirwa’s management and staff. It will make us even more competitive, alert, and committed to our clients and consumers. We are ready to face it and its challenges. We know that with the entry of a new player naturally competition will heighten in a situation where the new player will shake up the dynamics with our markets. I believe that the entry of new local or regional competitor is good for the consumer and for the beverage market in general. In the end the consumer will decide which product he prefers. It is our challenge and mission to constantly serve the needs of our consumers. You had announced that Bralirwa is set to spread its wings to the EAC Market. How concrete are these plans? Piederiet: Today, Bralirwa is exporting beer and soft drinks to Eastern Congo and Southern Uganda. As always we are constantly monitoring the opportunities to export our products to the region. With the start of the EAC, new opportunities will certainly arise. However, it should be realised that high costs of transportation in the region, local brand loyalty, and the use of returnable bottle system somewhat limit the opportunities. Hence, our plans will be focusing on selective market opportunities using appropriate products existent within our huge family of offerings. It will thus be a selective process of using selective products. It is not going to be a blanket marketing operation. This expansion programme will ensure that in the spirit of competition Bralirwa will clash with East African Breweries Limited, the regional beer giant. Can you really take on EABL? Piederiet: We will only venture in areas with unique opportunities to Bralirwa using the strength of our high quality portfolio. In this I have to point out that we will have to be smart by identifying the right products using the right partners. We have noticed that some of our brands already have a certain appeal to consumers in the region. If so then it will be like a cat taking on a lion. So what strategy will you use to upstage the lion? Will we see a David and Goliath kind of strategy on a likely warfare between the two entities? Piederiet: We certainly don’t envisage a head-on confrontation with regional competitors. As I mentioned before, we will focus on selective opportunities using the strength of specific brands in our portfolio. Of course we have to focus on cost-efficiency to be able to compete regionally. Best practices of our major shareholder Heineken will help us to make our operations efficient. For instance, we will closely look at our fundamentals at consumer level and the cost efficiency of our value chains. We have to cut down further on costs by championing least cost options. In this we will have to leverage our strengths in order to compete. We shall jealously take care of our backyard in order to use such strengths to forge a bridgehead to compete regionally. So, first of all, we have to satisfy the local needs and bring enjoyment to all of the Rwandan consumers. This will be our base for possible future regional expansion. On local value addition kindly elaborate on how you will increase this component within your supply chains. Piederiet: As a commercial company, our main driver behind such projects is related to costs. Increasing local components for production makes a lot of economic sense. Use of local materials is cheaper as opposed to imports, of course as long as the quality of our end product is stable and improved. We intend to support local suppliers in tandem with the aspirations of the country in areas with agricultural and industrial development needs. In this line of thinking we have thus forged a long term partnership with maize-milling company Minimex to demonstrate our commitment in such local value addition endeavors where a 300 hectare maize growing project is underway in Bugesera within Eastern Province. In this we intend to have a commercial company which will be growing maize in a modern and mechanized way by using international best practices. The yield per hectare should go from a current 1 ton/ha to 5 ton/ha in the first stage, with an ambition to reach 10 ton / ha. We will invest in modern techniques, people, and equipment to achieve this. On corporate social responsibility – What are you doing? The local soccer league is in need of sponsorship, yet Heineken is known for soccer sponsorship, why did you pull out? Piederiet: For the 50th anniversary our CSR program is offering two unique projects. The malaria bednet project which is supported by the Heineken Africa Fund and US$850,000 will be spent on curbing the malaria prevalence in Rwanda. This project intends to kill two birds with one stone by combating a challenge while boosting investment of another local manufacturing concern right here in Rwanda, hence a private-private and private-public partnership. Utexrwa S.A will be given a pre-financing package to purchase state-of-the-art production equipment to locally produce mosquito nets. Once the nets are produced, Heineken/Bralirwa will donate the nets to the Ministry of Health(MOH). Distribution of the nets will be done through the existing health workers structure of the MOH in cooperation with Bralirwa. The second project is building a Rwf 250 Million secondary school in Rubavu, in the neighborhood of our brewery. On soccer Bralirwa is still interested in supporting local football. One thing I have to say clearly here is that, sponsorships of this nature must not be mistaken for straight donations. In a classic football sponsorship like the one Heineken does for the UEFA Champions League, you give something in return for something, in effect a quid pro quo arrangement. On the former Bralirwa local football league sponsorship I believe there was a lack of enough clarity on each other’s expectations. So we split up. But we are keen to support the development of local football in Rwanda which is being discussed now with FERWAFA. How has performance been of the Primus Ntoya since its introduction to the market? Piederiet: Since the launch in March 2007 Primus Ntoya has reported double-digit growth every year. Consequently this product is taking up 10% of our total Primus volumes. This is very encouraging. The small bottle satisfies a need in the steadily maturing Rwandan beverage market, where urbanization plays an important role. How far has Bralirwa gone with selling beer in kegs? Any new products? Piederiet: Draft beer is a relatively new proposition in the Rwandan market. We see draft beer as an interesting niche that supports the brand strength of Mutzig. We see a freshly powered Mutzig as the ultimate drinking experience. Looking to the significant growth figures of this proposition, we feel that the Rwandan consumer more and more embraces draft beer. We currently have an outdoor campaign confirming that Mutzig draft beer is, “The best beer served at its best.” Regarding new products, I can say that we are in constant contact with the consumer to identify new opportunities in the beverage market for Bralirwa. Young children are consuming more alcohol. What is Bralirwa doing to promote responsible consumption of alcohol locally? Piederiet: We have internal and external control mechanisms which are stringent and world class in nature. We intend to have messages embedded on our labels which tell our consumers to drink responsibly. We intend to work with local authorities to assist in this endeavor. For instance we want to pass a strong message to the society that alcohol and driving do not go hand in hand. Furthermore, Bralirwa will never allow underage drinking. This is a core ideal forming part of requirements within all our working sites. To drive home this point the recent, ‘Guma Guma’ events that we have just wrapped up had to abide by this requirement. Ends