Kazakhstan 2017 | INDUSTRY | INTERVIEW

TBY talks to Omer Ogun, Managing Director of Efes Kazakhstan, on new recipes, investing in staff, and crafting the brews that people want.

Omer Ogun
Omer Ogun graduated from Yıldız Technical University’s faculty of engineering. He joined the Anadolu Group in 2000 as an Operations Manager at Efes Russia. In 2006 he was appointed Operations Director of Efes Russia. In 2007 he was assigned Task Force Director for the Uzbekistan market at Efes Beer Group. From 2008 to 2012 he was Managing Director for Efes Kazakhstan, and from 2012-2015 he was the Managing Director of Efes Ukraine. In September 2015 he was assigned to the position of Managing Director at Efes Kazakhstan. He speaks Turkish, Russian, and English.

Why did you establish your first factory outside of Turkey in Kazakhstan?

Kazakhstan was the first country chosen by Efes because of the opportunities it offered in being open to Europe and having close ties with Turkey. Our brewery in Karaganda was the first investment of Anadolu Group in 1997. The total investment of Anadolu Group in Kazakhstan is around USD650 million, and the part invested through Efes Kazakhstan is above USD250 million for the three breweries we have—one in Karaganda and two in Almaty

What have been the main achievements for Efes in Kazakhstan?

Our main achievement has been to become the absolute market leader. In 2008 our market share was 25% and within three years we increased that to 55%. We brought many innovations to the market such as the new concept of fresh beer in a bottle. Typically the shelf life of beer is nine to 12 months, while the shelf life of the new concept created by us is four months. In addition to this, other new types of beer were launched, like easy-drinking lager (a mild beer under the Kruzhka Svezhego brand) and unfiltered beer

What is your strategy for being a trendsetter in the market?

First of all a company needs to feel the market. It should take some lessons from the past but it does not mean the same pattern should be repeated in the future. Companies should understand where the market is going. Nowadays beer markets in the CIS region are either declining or flat, due to many reasons like regulatory constraints and fall in purchasing power. Particularly in Kazakhstan, the beer market shrunk around 20% in the last five years. So, we continue investing in innovations to develop the category. Last summer we introduced a new category—unpasteurized beer in a bottle, called Three weeks (“3 ”). Secondly, we want to pursue our goal of serving our consumers with products brewed from 100% natural raw materials like malt and hops, ensuring world-class quality and taste from our breweries equipped with latest technology.

What strategy will you adopt to achieve your goal of doubling business by 2020?

One of the strategies is investing not only in equipment, but also in people. In order to be successful a company needs good employees generating smart ideas. Generally in our industry, the turnover for employees is around 15%, while in our company it is 2.5% because we invest in employees. This year we provided 20,000 hours of training to our staff, or about 30 hours per person. Our employee engagement, which represents employees' satisfaction, is 76% compared to the country average of 62%. The second aspect is the portfolio of products. We continually emphasize the importance of innovation, because consumers are bored with purchasing the same product over five or 10 years, and so companies should give them something new.

What will be your main focus for 2017?

We already have three breweries but each year we make investments of more than USD10 million into Kazakhstan's market. We will continue to be innovative by launching new brands and creating new trends.

What trends do you see in the consumption of alcoholic beverages in Kazakhstan?

The market is not growing steadily, mostly due to advertising bans. Now there are some initiatives from the mass media sector to lift this ban. Removal of the ban will help the beer market to grow. Elsewhere, draught beer channels selling beer in plastic bottles have been growing. The share of key accounts in beer sales in Kazakhstan is growing and there is room for growth in the future for that channel.

The government seeks to introduce duty on alcoholic beverages. How will this affect Efes?

Currently we pay an excise tax per liter of beer. It was KZT26 per liter but in 2017 it will be raised by 50%. This is of course negative for us, as it limits market growth. Also in 2016 additional tax was introduced for underground water usage. To overcome the increase in tax burden we should be more efficient.

What are your expectations for 2017?

The market did not grow in 2016, and in 2017 we expect a decline due to an increase in the tax burden on companies. But we are the locomotive of the beer industry and locomotives never stop. We pull others behind us and will not stop because we know what to do and how to react to the market and we will continue in that manner. In 2017, although the market will decline, we will have positive growth. We still have good expectations from the market and we believe in Kazakhstan, the economy, the future of the country, and the people. That is why we are here and we will continue working to make life more enjoyable for people.