Brewers Blog

10
May

Cans are conquering the market

Myanmar’s second-largest brewery, the Dagon Beverages Company, has identified a rising level of demand, centred around the can. From 2015 to 2016 alone, its share of total production output rose from 45 to 60 per cent.

Dagon had to come up with a rapid response to this trend, and put in place the requisite filling capacities. And this is how the brewery went about it:

  • When it was founded back in 1998, Dagon had already installed not only a kegging line, but also a Krones combined line for glass containers and cans, rated at 18,000 containers per hour.
  • In 2012, Dagon divided up this combined line: the glass line stayed where it was. Can filler, seamer and depalletiser were combined in a different hall with Chinese kit for pasteurising and packing. At this time, the EU’s trade embargo for Myanmar was in force, so that Dagon was unable to purchase any technology from Europe.
  • After the embargo had been lifted, in 2015 Dagon installed a new complete glass bottling line from Krones rated at 28,000 bottles per hour. That meant the brewery had sufficient capacities for glass containers, so that the old line became obsolete.
  • This is why in 2016 Dagon asked Krones to convert this old line back into a combined line for glass containers and cans.

Combined line for glass containers and cans

The new line handles 24,000 cans per hour and runs at a very high efficiency of 98 per cent. It contains the following machines:

  • Smartpac unpacker
  • Pressant Universal sweep-off depalletiser for bulk containers
  • Cantronic empty-can inspector
  • Volumetic VMS-C can filler
  • Can seamer
  • Checkmat system for fill level inspection
  • Variocart carton erector
  • Variocol carton sealer
  • Smartpac packer

“This was a very good investment”

The new line primarily handles cans, for filling glass containers, it is being used only as a stand-by. “This was a very good investment. The installation work had been completed before the peak season in July 2016 – and since then our new line has been running round the clock,” explains Brewmaster CF Chan.

To enable the existing Krones canning line to be utilised more efficiently as well, Dagon also asked Krones to upgrade its filler and seamer: from the 206-type lid to the modern-day 202-type design. “This change-over saves us about 25 per cent of the costs involved, because, of course, the lid is the heaviest part of a can,” says Assistant General Manager for Production, Thiha Myat Lwin.

Now that these measures have been completed, Dagon possesses annual filling capacities of

  • 720,000 hectolitres in cans,
  • one million hectolitres in bottles,
  • and 250,000 hectolitres in kegs.

That suffices for the time being. The bottleneck in the production operation is now the cold blocks and the brewhouse, with an annual output of 850,000 hectolitres.

For both its new lines, the combined line and the canning line, Dagon once again opted for Krones. When asked about the reasons, CF Chan didn’t have to think twice: “We appreciate Krones’ reliability and, of course, the excellent filling technology. In terms of the price, too, Krones wasn’t all that far away from its competitors. Since we’ve been working with Krones kit for many years now, we were familiar with the technology, and very satisfied with the spare parts supply capabilities as well. But the most important reason as far as we’re concerned was that it was ‘Made in Germany’, which has always given us excellent service in terms of leading-edge technology, superb craftsmanship and streamlined layouts. With this technology, we can quite simply sleep easier at night.” For consumables, too, he unreservedly trusts the German seal of quality: KIC Krones supplies the appropriate lubricants for all machines.

The future lies in the middle-class segment

CF Chan, who qualified as a brewmaster at the Institute of Brewing and Distilling in England, has been responsible for beer production at Dagon since 2006. What does he see as the greatest challenge when you’re brewing beer in Myanmar? “In the years of the EU’s embargo, we pretty much had to rely on ourselves for everything. But this made us inventive. We often had to find solutions using only the very simplest of means so that we could keep our production up and running. Now, fortunately, we are able to get European support again.”

Dagon’s beers are traditionally more commonly encountered out in the countryside than in the metropolis of Yangon. Since the income of the rural population is significantly lower than that of their urban counterparts, the prices for Dagon beers are quite low as well. Although the number of people with low incomes is still very large, the situation in Myanmar is steadily improving. There’s a challenge to face, however, in the increasingly fierce competition from international brewing conglomerates. That’s why Dagon intends to raise its profile – for instance, by introducing a 330-millilitre glass bottle plus a 640-millilitre individualised bottle with a distinctive shape. The foundations are in place, the filling capacities are ready and waiting – so now it’s time for the marketing people at the Dagon Beverages Company to show what they can do.

 

Four types of beer
Since the Carlsberg subsidiary Brewinvest withdrew in 2009, the Dagon Beverages Company Ltd. has been owned 100 per cent by the state-run Myanmar Economic Corporation (MEC). Dagon brews four different beers, all of them with yeast and hops from Germany: Lager, Extra Strong, Super Premium Strong and more recently Light Lager as well. It also produces three soft drinks. There is a second plant for distilling rum.

The beer is filled not only in kegs, but also in the country’s typical 640-millilitre glass bottle and in 330-millilitre and 500-millilitre cans.

Steep uptrend
“We’ve changed the recipe, matched the beer more closely to the market’s taste preferences, modernised the label, and strengthened the sales team,” reports Managing Director Mr Hla Min Tu. These developments were also the reasons why Dagon Beverages was able to upsize its output between 2000 and 2013 from 20,000 to 300,000 hectolitres. The opening of Myanmar and the lifting of the EU’s sanctions in 2013 gave yet another fresh impetus to demand, which reached a volume of 600,000 hectolitres in the 2016/2017 business year. The target for 2017/2018 is 700,000 hectolitres.

Glass bottles in a buy-back system
For filling glass bottles, Dagon uses a pretty unique procurement system. The brewery doesn’t use any bulk glass at all. What it does is to buy used 640-millilitre glass bottles from collection points, which are transported to the brewery in plastic sacks by trucks. There the staff place them by hand in crates, from which the bottles are then fed into the line by a Smartpac unpacker. The filled bottles are packed ready for dispatch in folding cartons with flaps on another Smartpac.

Krones is the Gold Sponsor of SEA Brew 2018, visit them at Booth A14/15 in the Trade Hall.

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