Business Advantage PNG speaks with SP Brewery Managing Director Ed Weggemans about the company’s sharp focus on its bottom line and sustainability in tougher market conditions.

Ed Weggemans, SP Brewery Managing Director. Credit: BAI

SP Brewery is looking to Papua New Guinea’s long-awaited resource projects to boost its sales in 2024 after its business was buffeted by tougher market conditions over the past year.

“I’m quite convinced that, in the medium-to-long term, the major investment projects are going to happen,” Weggemans says. “Those projects put money into workers’ pockets and that’s going to affect us in a positive way.”

“We’re ready for the boom to happen,” Weggemans says. “We’re maintaining our capacity, which is currently over-capacity, because we have history from the previous LNG boom. We’re just hoping that it will happen sooner than later.”

In the meantime, SP Brewery will focus on supporting retail outlets that were forced to shut down because of the impact of rolling liquor bans, social unrest and inflation, he says, adding that the challenges of 2023 “taught us to be a bit prudent and less optimistic about the future”.

“When a liquor ban is announced we, of course, are in full compliance, but that really restricts our ability to trade,” he notes. “We have to protect the bottom line as much as we can.”

One of SP’s biggest challenges is the rising supply and popularity of unregulated spirits, which skirt the excise taxes that account for about 46 per cent of the price of a carton of beer, Weggemans says.

“You’ve got uneven business conditions, where one part of the industry is heavily compliant and audited and another part of the industry is not, and that’s obviously problematic for a major investor in the economy.”

The current challenges haven’t stopped the HEINEKEN-owned brewer from investing, however. In September 2023, it opened a new state-of-the-art waste water treatment plant in Port Moresby, part of its commitment to minimize its environmental footprint. A second plant in Lae is set to follow, while the brewer is also embracing renewable energy.

“We’re going to cover all the available roofing area with solar panels in both Port Moresby and Lae,’ says Weggemans. “We have an ambitious net zero carbon emission target for our production facilities by 2025”.

This article was first published in the 2024 annual edition of Business Advantage Papua New Guinea.