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Cheers to China!

(China Daily)
Updated: 2008-10-20 07:29

Miguel Patricio experienced a memorable trip during his first visit to China last year.

He flew from Canada to Beijing, then to Fuzhou, and took a car to Putian, more than 100 km south of Fuzhou, to visit InBev's brewery there. He was struck by the huge differences between China's cities and rural regions.

But with years of experiences living and working for InBev in seven countries from Europe, South America, and North America to Asia, Patricio is confident about his career in this dynamic country and believes the potential market will provide InBev with a brighter future. In a recent exclusive interview in his new office in Shanghai, Patricio shared his views with China Business Weekly reporter Li Fangfang.

Q: What's the biggest challenge for your company in China market?

A: As a foreign player in China, we have to deal with historical outstanding issues such as shareholders, people and land, when we want to restructure and integrate our operations in China. Secondly, competition in China is getting fiercer in recent years. Some of the players have irrational behavior and fight price wars. Just like everyone else, we need to constantly balance profitability with volume growth. Moreover, over the past year, we see the price increases of raw materials going through the roof.

However, by insisting on our strategy of a winning brand portfolio, winning at the point of connection, enhancing world-class brewing efficiency and targeting external growth, we believe our dream - the best beer company in a better world, our people, and our culture will drive our success in China.

Q: What are your company's contributions to China's brewery industry?

A: When InBev entered the China market in 1984 we transferred brewing technology and management knowhow to Zhujiang Brewery in Guangzhou. This commitment to working with our partners has been the foundation of our approach ever since. Since then, we have built a number of partnerships in China. In each of these we have worked with our partners to share our knowledge and experience in the industry.

We remain steadfastly committed to building partnerships with Chinese breweries. We believe this approach supports the adoption of global best practices across the industry - including management, procurement, marketing, sales, distribution, and environmentally responsible brewing.

In addition, our business continues to help support the local economies in which we operate, from investment in new breweries to employment and generating tax for local governments. In the last financial year we contributed approximately 1.3 billion yuan in tax revenue to local government.

Q: Nowadays, the environment and energy crisis has become a global issue. As an energy consuming manufacturer, what efforts have you made for a better world?

A: InBev is a global leader in promoting environmentally friendly brewing processes through water and energy conservation, as well as recyclable and environmentally friendly packaging.

For example, our two new breweries in Zhoushan, Zhejiang province, Changsha, Hunan province, are fitted with modern and efficient technologies, enabling us to put China on the map to implement global environmental best practices. In the Zhoushan Brewery, InBev's filtration technology will for the first time be applied. The technology only uses re-generable filtration aids and will save 90 tons of waste in Zhoushan.

Moreover, we have saved 60,000 tons of coal equivalent and 7 millions tons of water in the past 3 years.

Q: As president of a multinational company's operation in the Asia-Pacific and based in China, what's your view of China's 30 years of market reform and opening up?

A: China today plays a significant role on the world's stage. The just completed Beijing Olympics is a demonstration of China's importance and contribution to the world. The prosperity of China today shows that 30 years ago Chinese leader Deng Xiaoping made the most significant and wise decision for China and its people.

For InBev, as the world's largest brewer, we had the opportunity to do business in China as a result of Deng's open door policy. We believe we can make a difference here by providing quality beer choices to Chinese consumers.

Q: What are your expectations for China?

A: We are optimistic about the prospect of developing our business in China. We have received much support from local governments. We look forward to continued support from the central government for our business development.

We are very glad to see that over the years, law and regulations are being more clearly defined, which definitely help us in making investment decisions.

Q: What's your ambition in the China market?

A: Compared to the leading Chinese brands, Tsingtao, Snow and Yanjing, we are still relatively small and new to China. We respect our Chinese competitors and have a lot to learn from them. Currently, we are running a brand portfolio of seven Chinese local brands. Our goal is to integrate our business across the 20 some breweries and implement global best practices to increase the efficiency of the operations.

InBev's global mission is to build the best beer company in a better world. We promote responsible drinking to consumers and good environmental performance in our breweries. We are committed to building a Chinese national brand and upgrade regional brands. We will continue to improve the standard of China's beer Industry by working together with Chinese partners.

I am full of optimism for the beer industry and InBev's development in China.

(China Daily 10/20/2008 page6)