BEER TO THE GROUND

Kazakhstan 2018 | ECONOMY | INTERVIEW

TBY talks to Ömer Öğün, General Director of Efes Kazakhstan, on operational challenges as a result of devaluation, the introduction of new products, and expectations for the future.

Ömer Öğün
BIOGRAPHY
Ömer Öğün 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.

What have been some of the key operational achievements at Efes Kazakhstan over the last year?

2017 was not an easy year for Efes Kazakhstan and the beer industry in general. We still suffer from the devaluation of the local currency and, as a consequence, the increased prices of imported materials, which affected our financials. The tax burden is increasing every year, including an excise jump this year of 50%. Competition is very strong and not always fair. However, despite these unfortunate circumstances, we managed to keep our leadership position with a more-than 52% market share. We increased our sales in can and keg formats by 22 and 18%, respectively. Our total sales increased by incredible 15%—a level of performance we have not been experiencing over recent years. We work hard to improve our brands portfolio. For instance, we launched very successful brands, including Slavna Pivnice, produced by authentic Czech traditions of brewing, and Stary Melnik Iz Bochonka, which is one of the most consumed local beers in Russia. They are growing MoM, and in less than nine months Slavna Pivnice reached a 1.5% market share. We achieved these impressive results by increasing the efficiency of our production. For example, our water consumption decreased by 12% per liter of beer, which makes us one of the best companies in the world in terms of water consumption and brings us to the highest international standards. We do this to preserve nature in accordance with our sustainability strategy.

Leading global breweries AB InBev and Anadolu Efes Group have merged their businesses in Russia and Ukraine. What impact, if any, could this have on operations in Kazakhstan?

The merger of AB InBev and SABMiller—the number one and two brewing companies in the world—was a huge transaction. Since Anadolu Efes Group and SABMiller were in partnership, after the merger AB InBev acquired a 24% equity stake. It was then decided that both companies would merge their business in Russia and Ukraine 50-50. We believe that this decision will strengthen our positions in both countries with the potential for further growth. There is no decision on Kazakhstan operations yet. However, we expect the global merger will make our portfolio stronger and more diverse with wider range of beers for consumers.

How would you describe the current trends in Kazakhstan's F&B sector and what opportunities do you foresee in the near future?

I can say that despite the difficulties, the beer market is growing because of the low base level we were at in 2016. We hope this trend will continue in the coming years with the support of the government's policy to decrease consumption of alcohol per capita by switching consumers from hard liquors to soft alcohol drinks, which corresponds with the best international practice. We have ambitious plans for the years to come, which includes further improvements of our portfolio and route-to-market, innovations in products and trade marketing, and the launch of new brands and propositions. Moreover, we will be focusing on maintaining an excellent quality of products with 100% natural ingredients. We want the freshest beer for our consumers, investments in our personnel, and an increase in our corporate social responsibility. We are sure that in the future we will be able to fortify our leadership positions in all segments of the market, improve our financial results, and make our organization stronger than ever before. All this will be possible thanks to the wide audience of our consumers, and we are very proud to bring them the best beers in Kazakhstan.