SUBANG JAYA: Carlsberg Brewery Malaysia Bhd is looking at possible acquisitions of beverage manufacturers in the region in 2009 as part of its long-term strategy, said its chairman Datuk Lim Say Chong.

He said the company would fund the acquisitions using its RM227 million cash reserves, adding that Carlsberg had identified at least two investment opportunities.

“We cannot say much now as talks are ongoing but the acquisitions will be important for our long-term future,” he told reporters after the company’s AGM here on April 28.

Carlsberg managing director Soren Holm Jensen said the company was not forced into a situation to make the acquisitions as it already had a strong brand name.

“It is an opportunity for us to make the money work in a better way through these types of investments,” he said.

Lim, meanwhile, said the company’s shareholders were satisfied with its explanation at the AGM that it did not declare a special dividend for FY08 as the cash reserve was to be utilised for acquisitions.

On its outlook for the current year, Jensen said the company anticipated a challenging 2009 due to the economic slowdown and its impact on consumer spending.

He said the company also expected to face unfavourable raw and packaging material costs due to forward buying and continued intense competition from the local industry, smuggled beers and other alcoholic beverages.

He said smuggled or illicit beer made up an estimated 20% of the local beer market.

Jensen said the local beer market, of which its share was slightly less than 50%, was expected to be slightly flat this year given the economic climate. He said the Carlsberg brand achieved a 14% growth in domestic volume last year.

Jensen also said that while the beer business was generally resilient, changes in consumer spending patterns and preferences could affect industry players as a whole.

“But our joint ventures last year with Luen Heng F&B Sdn Bhd and Cottingham & Co Ltd will help us perform better this year. Our investment in Luen Heng gives us access to seven more brands that we will be able to market here,” he said.

Carlsberg holds 70% of Luen Heng and a 37.5% indirect stake in Cottingham.

The company has a wider range of imported international beer brands such as Stella Artois, Hoegaarden, Budweiser, Foster’s and Beck’s via its joint ventures with Luen Heng and Cottingham.

Jensen also said to overcome the challenges of uncertainties in the market, Carlsberg had identified four key strategic priorities — cost efficiency, cash optimisation, winning behaviours and commercial MWBs (must win battles).

For the financial year ended Dec 31, 2008, Carlsberg posted a net profit of RM76.14 million on the back of a RM960.2 million revenue.