Myanmar Carlsberg Co Ltd The case describes how Myanmar Carlsberg contributes to building capacity in Myanmar by implementing high international standards within safety, anti-corruption, education and environment. In February 2013, Carlsberg signed a contract to invest in a new brewery in Myanmar. Carlsberg is the first Danish company to set up in Myanmar, and the first beer producer in the world with permission to brew beer in the promising Burmese market. The impressive new brewery is located in a new industrial zone in Bago, which is a couple of hours drive from Yangon. Only the very last licenses are needed before Myanmar Carlsberg can start brewing beer in 2015. Myanmar Carlsberg brews three brands of beer, Carlsberg, Tuborg and the new local brand “Yoma”, which in Burmese translates to “Mountain chain”. A complicated political system Myanmar Carlsberg is a joint venture between Carlsberg and Myanmar Gold Star (MGS) Breweries. This is the same partner Carlsberg worked with in the 90s, which was the last time the company was active in the country. Carlsberg owns 51% and MGS owns 49%. “It would have been extremely difficult to start up in Myanmar without a good partner” says Daniel Sjoegren. Daniel Sjoegren is the former Managing Director with a long international career in Carlsberg. Daniel has been in charge of the complex process to start-up business in Myanmar. “We had to have more than 200 different licenses from different authorities in order to start building the brewery and producing beer. And to be honest, these licenses have not been given as quickly as we would have liked” Daniel Sjoegren continues. Myanmar Carlsberg awaits the very last licenses and therefore have had to postpone the expected start in December 2014 to medio 2015. “I think the initial romance period is over in Myanmar. The period where western companies rush to the country hoping to make good business in a very short time” Daniel Sjoegren explains. “Now the focus is more on working long term and professional with developing your business. I think that the moment we experience companies like ours start making money, we will see a snow-ball-effect, which will attract more serious companies to the country”. As other companies, Carlsberg experience that the political system in Myanmar is immensely complicated. Laws and regulations are under rapid construction, they constantly change and information is difficult to obtain. Therefore, it is important to have a high level of flexibility in a company’s business plans. Carlsberg also has a vast expert knowledge of starting up in emergent markets, which has been useful during the process. Zero tolerance in terms of corruption “Our policy of zero tolerance in terms of corruption has obviously given some challenges. What it has meant is some delays. But that's all", explains Daniel. Carlsberg is currently translating the Group’s CSR policies and Code of Conduct into Burmese. All employees are trained in anti-corruption, and it is made clear to all that Myanmar Carlsberg does not accept or offer any kind of bribe. “It is a journey, as bribing is a deeply rooted part of society in Myanmar. All our employees need to understand that at Myanmar Carlsberg we consider corruption as damaging for our business. This is a culture we are consistently building across our group and this also on Myanmar” Daniel explains. Myanmar is a high-risk country in terms of CSR In 2013 The Danish Institute for Human Rights (DIHR) was invited by Carlsberg to assist in the development of an assessment of human rights risk for Carlsberg Myanmar. This project’s objective is to support Carlsberg in implementing human rights due diligence in its operations in Myanmar. It aims at ensuring that: • The key human rights impacts of Carlsberg´s operations across the value chain in Myanmar are identified; • Carlsberg staff and management are made aware of and sensitized to human rights risks and actual and potential impacts in their value chain in Myanmar; • Actions plans are designed by Carlsberg to address potential adverse impacts. “The partnership has given us an insight into the CSR context that we are in, and which processes we need to have in order to manage these challenges..” Daniel notes and continues: “It has been valuable for us to use a third party as the Institute for Human Rights. They have challenged us during the process" concludes Daniel Sjoegren, who is awaiting the final report. On Group level Carlsberg’s CSR efforts are put into practice with a long list of policies, training material, guidelines and processes, which Myanmar Carlsberg will implement as they move forward: “I have received massive support from very competent people in the Group, people who have been through this process before in Asian countries”, Daniel tells. “I am fully covered in terms of legal questions and screening of business partners relating to international trade sanctions.” A million man hours and no injuries In August 2014, Carlsberg celebrated the milestone of reaching 1,000,000 man hours without any injuries during the construction of the new brewery. This impressive result does not only live up to Carlsberg’s global goal of “Zero Accidents”, it is also a ground-breaking result in Myanmar, and strikes a chord with authorities, partners and other companies. The result is achieved by a consistent and systematic effort. It started with a clear signal from management on a rainy day at the end of 2013, a short while after the first sod was cut. Daniel Sjoegren tells that he at one point received a call from his Supply Chain Team from the building site in Bago, informing him that more than a hundred workers had arrived at the site without safety shoes, helmets and other safety gear. “How are we to handle this?” they asked the Managing Director. “On the one hand, we want to get started and meet our deadlines” Daniel Sjoegren explains and continues: “On the other hand, we do not want to compromise on safety. I decided to send all the workers home with a picture in their hand, showing them how they should dress when they are on Carlsberg’s grounds”. The picture shows a Carlsberg employee with a helmet, safety shoes and appropriate work clothes. This incident was a critical milestone for Myanmar Carlsberg’s work with safety. Afterwards an intensive and systematic training programme for all employees with access to the building site was conducted. Numbers from December 2014 show that Myanmar Carlsberg have spent 7,200 training hours. The training was not only given to Carlsberg’s own 146 employees but also to employees of the contractor and sub-contractors. In total, almost 2000 employees have gone through the safety training. Besides this there are daily talks, weekly presentations, meetings and discussions of safety and work environment. It has been necessary to create an awareness amongst the employees that it is in their own interest to return home safe after work – every day. When an employee has gone through the training program he receives a formal certificate. Employees who have made a special effort to further Carlsberg’s safety culture receives a diploma and are honoured by their colleagues and management at a ceremony. “Even though our safety organization now is in place, we are aware that working with work environment and safety is a continued process, which demands constant focus” says Vaibhay Khedkar, who is Supply Chain Director and has the overall responsibility for the safety work. Today, no person will have access to the brewery without a thorough briefing about the safety procedures and an order to wear safety shoes and helmet. Education is international business It is a great challenge to recruit qualified employees in Myanmar. After 50 years of military dictatorship and with an educational system that is run down, there is a great lack of well- educated and English speaking employees in Myanmar. “Besides this the recruiting processes are complicated and opaque and they take a long time to manage” Daniel Sjoegren explains. Myanmar Carlsberg’s experience is that the ambition level amongst the applicants is surprisingly low. Myanmar Carlsberg represent a business oriented and competitive behavior, which is a new mind-set in Myanmar. To achieve the “Winning Behaviors” that Carlsberg stands for, a great investment in upgrading professional skills, team building and international business understanding is needed. Currently, there are 56 employees at the brewery. The management team is in place. They were hired several months ago and are now working on upgrading their professional qualifications and building up a team. The competency development scheme is put into a system with individual plans and clear KPIs for all employees. The international experts, recruited from other Carlsberg companies, will systematically be replaced by local managers and soon as their level of competences is sufficient. “We are in the process of developing a Myanmar Carlsberg culture from scratch. We are flexible in relation to the culture that we are working in, but the goal is clear. We are working towards becoming a team, which is pulling in the same direction and share the Carlsberg values of a “Winning Behaviours”, says Vaibhav Khedkar, Supply Chain Director and responsible for the implementation of Carlsberg’s values and high standard of quality. Winning Behaviours includes five values: empowerment, social responsibility, team spirit, winning spirit and focus on customers. By December 2014, Myanmar Carlsberg had almost 150 employees. It is expected that the number of employees will more than double as the beer market develops. Studies show that for each employee hired at a brewery, 9 new jobs a created in relating sectors such as agriculture, logistics and sales.