FRANCE – Dutch multinational brewing company, Heineken, is set to close its to close or sell one of its three French breweries, which could affect 220 job positions.
The company said the potential closure or sale of the Schiltigheim site, located near Strasbourg, France, will enable it to concentrate production assets into two breweries instead of the current three to ensure long-term competitiveness in the country.
In addition, Heineken plans to invest around €100 million (US$103.94m) to modernize, expand and improve the environmental performance of its remaining two breweries in France, in Mons-en-Barœul and Marseille, with the creation of new jobs at both sites.
The site at Schiltigheim, which is on the verge of closure or sale, underwent a significant expansion in 2017, with the Dutch brewer investing €9.3 million (US$ 9.67m) to increase its existing production capacity of more than 450,000 hectolitres per year.
Pascal Gilet, chairman and CEO of Heineken France, said: “We understand the emotions aroused by the possible closure or sale of the Schiltigheim brewery, which we are all extremely attached to’ but the site suffers from numerous limitations due to its location, which is no longer strategic, and its production costs, which are too high. For these reasons, we are considering closing it or selling it within three years.”
“Our priority over that period will be to fully support the employees affected. We will also give close attention to any takeover offer for the site that may be received. This project is based on a strong ambition to maintain our overall production volumes in France at high-performing sites.”
Meanwhile, Heineken Malaysia Bhd says it will maintain a cautious outlook as market conditions remain challenging due to incessant pressure from global supply chain disruptions, recessionary fears, rising input costs, a weakening ringgit, and stubborn inflation that is impacting consumer purchasing power.
The business managing director Roland Bala added that the brewery will remain agile in responding to the volatile business environment and the “new market reality.”
The Malaysian subsidiary of the multinational beer giant plans to focus on delivering strategies to insulate the business from unexpected challenges while investing in its brands and capabilities.
In a filing with Bursa Malaysia, the company, for the nine months that ended Sept 30 this year, the company reported a 60% revenue growth to RM2.06bil from RM1.29bil a year earlier.
Its net profit was RM308.2mil, undergoing a similar two-fold growth from RM149.8mil in the previous corresponding period, which was marred by extended lockdowns.
This more than doubled its year-on-year (y-o-y) net profit for the third quarter ended Sept 30, 2022 (3Q22) to RM108.7mil, from RM51mil in the corresponding quarter of 2021. Revenue, rose 84.8% y-o-y for the quarter to RM720.5million.
Moving forward, Bala lauded the government’s decision not to increase excise duties on beer, as he believes any further hikes in the excise rates will drive greater demand for illicit alcohol.
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