Today, Efes Kazakhstan is the undisputed leader in the domestic beer industry with a market share of about 60%. The company has two operating breweries in Karaganda and Almaty, and is going to open one more plant which makes the company one of the largest investors in the Kazakh sector of FMCG. Serkan Eris, Managing Director of Efes Kazakhstan, shares with our magazine the future business development strategy.
The history of Efes Kazakhstan began in 1997, when Efes Beer Group decided to invest in Kazakhstan and acquired the Karaganda brewery Kolos. The plant, at that moment one of the the leading brewing center in the country, was renamed Efes Karaganda Brewery. It is worthy of note that this plant was the first investment by Efes Group outside of Turkey that indicates the importance and strategic interest of Efes Group in Kazakhstan.
The next milestone was the year 2003, when in the presence of the President of Kazakhstan Nursultan Nazarbayev the grand opening of the new plant Efes, built in the Burunday settlement of the Almaty region, was held.
Certainly, the availability of these two plants, the first one considerably upgraded and the second built "from scratch", meant a significant investments from our company. Thanks to a multi-million investment, we managed to carry out large-scale modernization of the Karaganda plant which has been operating since 1958. The main process equipment was completely replaced with up-to-date equipment, and modern high-tech production lines of Western manufacturers were set up. The company put into operation two new keg lines (Malek) in 2006, a new brewhouse (Krones) in 2008, a bottle filling line (KHS) in 2009, a PVPP filtration (M & L), a bottle washing machine (Gera) in 2011, etc. As a result, the capacity of the plant increased from 0.23 million dal in 1997 to 1.4 million dal in 2011, marking a 6-fold rise.
When Efes was entering the Kazakhstani market, the market share of the Karaganda brewery was just 8%. In February 2013, according to the marketing company ACNielsen, the market share of Efes Kazakhstan reached about 60% for the country, and to 79% for Karaganda alone!
It is important to note that the plant is one of the backbone enterprises in Karaganda and is one of the largest taxpayers. The amount of tax payments the company pays exceeds 20% of the Karaganda city budget. The plant is one of the attractive employers in the region. At the 2011 regional conference of trade unions, the collective agreement of Efes was recognized as the best one in the Karaganda region.
As for the Almaty plant, it became "green field investments" for Efes. With its opening, the creation of an industrial and commercial zone in Bereke region started, making this area a driving force in industrial development of the Almaty region today. The capacity of the plant is 1.92 million dal a year. It produces both domestic and licensed brands of beer. The plant is equipped with up-to-date facilities from the world’s leading manufacturers – German Krones, Steinecker, KHS and Italian SIG Simonazzi. The Almaty plant is the only one in Kazakhstan with a fully automated process of brewing.
The plant Efes is a regional leader in the field of environmental protection. It has modern facilities and equipment for aerobic and anaerobic wastewater treatment. Considerable funds are allocated for landscaping and beautification of the territory of the plant, making it an "oasis" in the steppe lands. With the opening of the plant, more than 500 new jobs were created. According to the Memorandum signed with the Akim of Karasai district, more than 40% of the plant employees are the residents of the above-said territorial unit. Moreover, most of the contractors that carry out daily ancillary work at the plant are from Karasai region as well. So, the company as a large business entity provides permanent jobs to the local population.
The plant is the largest taxpayer in Karasai district, and every year it pays more than 4 billion tenge as taxes, accounting for one-third of the local budget.
Besides, one more brewery operates in Almaty with about 50 people. This is the former “Dinal” factory, which we acquired from Heineken International in 2008.
Equipment installed at the plants of Efes Kazakhstan is found to be one of most advanced in Central Asia, making it possible to produce fresh natural product with the world-class quality that meets the highest international standards. The company produces and offers for sale an attractive range of beer products with different brand names that satisfy Kazakhstani consumer tastes: these are Efes Pilsener, Bavaria, Karagandinskoye, Kruzhka Svezhego (The Mug of Fresh Beer), Belyi Medved (Polar Bear), Lyubitelskoye, Zhigulevskoye. We constantly monitor market trends and changes in consumer preferences, boldly introducing innovative solutions for the packaging and new formats and flavor characteristics of our products. After merging with the world's second leading brewer company – SABMiller, the portfolio of Efes Kazakhstan now includes world’s famous brands such as Miller, Grolsch, Velkopopovicky Kozel, Pilsner Urquell and Peroni.
The obvious proof of the correctness of our choice is the success of the brands Belyi Medved and Kruzhka Svezhego, which together account for nearly one-third of the total market. The launch of the brand Kruzhka Svezhego in 2008 was a breakthrough project for the beer market in Kazakhstan and for the FMCG sector as a whole. That exclusive project was developed by Efes Kazakhstan and implemented at the Karaganda plant. It is based on a unique idea of draught beer, available also in bottles (bottle design is stylized as a mug of beer). Fresh product produced with the application of the gentle technique of pasteurization, had significantly changed the structure of the market, becoming the number one brand just two years after the launch.
All of our products are certified in accordance with international and national standards. The company's quality control department is equipped with modern laboratory equipment, so we are able to make an analysis at any stages of beer production, to be in line with European standards and EMU MEBAC (European Brewing Convention). The plant was awarded the international quality certificate ISO 22000 in 2011, and the certificate of safety OHSAS in 2012.
Top quality of Efes Kazakhstan’s produce was appreciated at various exhibitions and competitions. For example, in 2004, the gold medal was awarded to Karagandinskoe Light and Karagandinskoe Strong at the International Feast and Exhibition "Beer-2004" in Sochi in 2006, while Karagandinskoe Strong was awarded the gold medal at the 13th International Specialized Exhibition "The Industry of Beer and Drinks", held in St. Petersburg. In 2010 in Brussels, Kruzhka Svezhego and Kruzhka Svezhego Mild won the silver and gold medals, respectively. Just recently in April 2013 “Kruzhka Svezhego” and “Kruzhka Svezhego Mild” participated in Superior Taste Award which is conducted by International Taste and Quality Institute in Brussels and won the title – Remarkable product with 2 Golden Stars.
The company is justifiably proud of its close-knit, highly skilled and motivated team. We pay a great deal of attention to our employees and their families, providing a good benefit package to our staffers that includes health insurance, meals, transportation, wireless communication, various benefits and allowances for family events, births of children, etc.
The focus of our HR-policy is opportunities for professional growth of the staff. Special training courses and training programs are targeted at both the top management (Efes Leadership Pathway, Mentoring, MAP), and the development of talents of young specialists (Efes Mindshare) and employees of the subdivisions. A special emphasis is given to training, dedicated to the beer industry, as well as advanced training, occupational health and safety. In addition to the mandatory trainings, the unique training program Efes Blue Collar College (EBCC) is developed for workers of the logistical and technical departments, and the Efes Sales Academy (ESA) Program for the sales department.
Modern techniques of HR-management were introduced in 1999, including the policies for employee evaluation, payroll management and bonuses, career management, and training & development. Starting from 2011, a new online system of performance evaluation has been in use.
Efes Kazakhstan aims at the constant improvement of the working conditions of its employees. In 2012, a special committee on improvements was set up, involving representatives from all departments of the company. For example, following the recommendations from the committee, large-scale renovation of the office space, the entrance premises, and canteens at the Almaty and Karaganda plants was carried out, and recreational areas appeared on the territory of the plants.
Efes Kazakhstan applies a strong promotion policy which motivates employees to build the career within the company there are a lot of success stories, during 15 year period, when Kazakhstani employees who made extensive contribution to the company’s advancement, had been given promotion from positions of specialists to positions of managers and directors. According to a regular study of personnel involvement, they highly value the company's image as an employer, are glad with the management policies and the working environment, speak positively about the methods of teamwork. It is not surprising that in 2012, voluntary turnover rate in the company was only 2%.
Being a socially responsible company, Efes Kazakhstan constantly provides financial support to orphanages, communities of the handicapped, children from low-income families, veterans and pensioners in Karaganda, the Karasai district of Almaty region, as well as to the former employees, who now retired. We sponsor cultural and holiday events and concerts, and support local amateur sports teams.
As part of the sustainable development policy, the company improves technological processes to increase their environmental performance and the efficiency of energy sources use.
Public social responsibilities campaigns have a special focus to increase consumer knowledge about the culture of drinking beer, also inadmissibility of driving after having alcohol and selling beer products to minors.
Every year Efes Kazakhstan spends about 100 million tenge for corporate social responsibility programs, and this amount is increasing year by year.
Total investments by Efes in Kazakhstan have reached more than $245 million. For this period, over 40 billion tenge have been paid as taxes and other mandatory payments to the budget, and the number of staff grew to about 850 people.
During the past 10 years, since 2002, our average annual growth has been 20%, while the sales by the company have increased by 6 times! In November 1997, we ranked fifth with the market share of 10% and annual output of 8M liters. Thanks to the right strategy of development and investment, in September 2010, i.e. after 13 years, we had become the number one brewer in Kazakhstan, and last year we took the leading positions in all major cities of the country.
The company will not stop on these achievements and is going to considerably expand its presence in Kazakhstan by opening a new plant, the capacity of which will exceed those of all other Efes plants in Kazakhstan. So, Efes will have three plants in the country (if to count the former “Dinal” plant, then four), and this will rightly make Efes one of the largest in the FMCG sector with a total investment of about $500M.
With the increase of production capacity, we are considering the possibility of exporting products with the label "Made in Kazakhstan" to other countries and, first of all, to the Central Asian states.
Our achievements have been made possible due to the far-sighted policy of the country’s authorities and President Nursultan Nazarbayev, aimed at political stability, economic growth and support of foreign investment.
The successful implementation of the goals will bring Efes Kazakhstan closer to its strategic objective to double our business by 2020 and to become the most respected brewing company in Kazakhstan.