Hanoi Brewery Corporation: Investment for sustainable development

Hanoi Brewery Corporation: Investment for sustainable development

Hanoi Brewery Corporation is a State-owned enterprise established by Decision 75/2003/QD-BCN of May 6, 2003 of the Minister of Industry. The corporation operates in parent-company model by Decision 58/2004/QD-TTg of the Prime Minister with Hanoi Beer Company as the core inherited from Hommel Brewery, established in 1890 during the French time. In 1954, after the French withdrawal, the brewery was almost non-existent. After 50 years of restoration and development, Hanoi Brewery Corporation and member companies have become leading enterprises in the sector.

Achievements

In August 1958, the brewery made its first successful brew with outdated technology and limited production. The corporation has now eight member units including two independently accounted companies, three joint stock companies with majority shares owned by the corporation, a financially dependent company, a scientific research unit and a joint venture with a foreign country. The annual designed production output is 183 million litres of beer, ten million litres of spirit of various kinds, and five million litres of alcohol derived from cereals. The capital of the corporation has increased to some VND1,440 billion and the average growth rate in the past three years was 25 per cent. The on-year increase of turnover was 20 per cent, and accordingly budget revenue was 15 per cent and profit 25 per cent.

In the first 9 months of 2004, in spite of the price hike on imported materials and equipment (up by 10-15 per cent), fierce competition and fighting against fraudulent and smuggled beers, the corporation continued to meet the demand of the market without price fluctuation. The production value reached VND750 billion (almost 29 per cent more than the same period last year), the turnover hit over VND1,000 billion (up 16.71 per cent) and the export value reached US$13,500. The member units alone recorded nearly VND475 billion in production value (up 32.88 per cent), over VND642 billion in turnover (up 32.12 per cent), increasing their output from 58 million litres in 2000 to an anticipated 92 million litres in 2004 and started exporting to Japan, UK, Germany, and the US. The parent company itself has increased the production capacity and competitiveness by upgrading technology and equipment, applying the ISO 9001:2000 quality management system and preparing for ISO 14000 on environment in the second half of 2004. The corporation continues to improve the quality and diversity of its products to maintain its competitive edge in the next period. Together with its modernisation of equipment, the corporation has also succeeded in research activities such as the application of new technology in brewing, fermentation and using local barley.

Orientations for 2005-2010

To ensure a leading role in the production of beer and alcohol and high quality refreshment, the corporation has set out its objectives for beer production. Beer output will reach 200 million litres in 2005 and 500 million litres by 2010. The production line and technology will be upgraded with automatic mixing, pallet loading and a draught beer capacity of 240 kegs an hour.

In 2005, the corporation will build a brewery in Tien Phong commune, Me Linh district, Vinh Phuc province, which will start operating in 2007 with a production capacity of 100 million litres a year, and will be expanded to 200 million litres a year. The exploration of local water sources 80 metres underground proved to be good in quality and quantity for beer production. The corporation will also expand its markets to central and southern provinces and foreign countries.

Recommendations

To be competitive when Vietnam joins the WTO, the production of beer, alcohol and refreshments in Vietnam must be reorganised, increasing the efficiency of modern equipment and technology, transforming small and outdated enterprises, raising advertising and marketing expenditure. Preferential treatment must be applied to the development of material resources and the fight against fraudulent products must be intensified.

When visiting Hanoi Brewery Corporation at 183 Hoang Hoa Tham today, instead of the past gloomy scene, visitors will see modern workshops with equipment from Germany, Francea and the Czech Republic. Hanoi beer has become famous with consumers and a cultural trait of Hanoi. It is indeed the pride of the corporation and the people of Hanoi as a whole. In addition to numerous awards by the Party and State, during this October, the corporation is being recognised as a historic relic and the production line 2 (30,000 bottles/hour) as a project celebrating the 50^th anniversary of the liberation of Hanoi.

• Duc Minh