A tradition spanning beer and science

Carlsberg's chief wants Chinese businesses to learn from its heritage

Flemming Besenbacher has so many portfolios under his belt that it is difficult to gauge in what capacity he is talking to you. He is one of the most influential researchers in Denmark, world-renowned nanoscientist and chairman of the Danish beverage giant Carlsberg Group. At the same time, he is an expert on Danish corporate governance.

It was the last mentioned credential that brought Besenbacher to China recently. Though it was his 51st trip to the country, he sounded as excited as a first-time visitor when he talked about the Danish corporate governance mode and other aspects of the business.

Carlsberg is a unique company, he said. Its founder, J. C. Jacobsen, decided in 1876 to donate his entire business to the Royal Danish Academy, a non-governmental science academy founded in 1742 for the advancement of science in Denmark. The Carlsberg Foundation, which owns Carlsberg Group, is funded by dividends from the company and consists of five professors.

"It is a governance model that is working even today, and the foundation is the controlling shareholder. Though it has just 30 percent of the company shares, it accounts for 76 percent of the votes."

Besenbacher, who chairs the foundation, said he believes it has unique responsibilities and two main priorities. The first is to ensure that the world's fourth-largest beer group is on a strong footing. "We are more excited by the second responsibility of giving back around 300 million danish kroner ($45.56 million) every year for furthering basic fundamental sciences," he said.

"I normally tell everyone that you should remember every time you buy a product from Carlsberg Group, you are actually giving money back to society," he said. In an interview with China Daily on the sidelines of the Summer Davos forum in Dalian, Liaoning province, on Sept 10.

"I am trying to tell some rich Chinese people that it may be a good model to emulate in China." Besenbacher also spoke about globalization, the Chinese market and his interests in the country. Following are edited excerpts:

Could you tell us a little about the Circular Community initiative?

This is something that I am particularly proud of. Around 45 percent of Carlsberg's CO2 emissions came from our packaging, be it PET bottles, glass bottles or cans. In Denmark, we have initiated a new product together with a small Danish startup company and the Danish innovation foundation. We plan to develop fully biodegradable bottles made out of wood fiber. This year marks the beginning of the three-year product development process.

What are your views on globalization?

J. C. Jacobsen established Carlsberg in 1847 in Copenhagen. However, that has changed now. Carlsberg is no longer just a Danish company. Today, it is a truly international company operating in three major markets. We are in Asia - China is an integral part of the Asia business, Eastern Europe and Western Europe.

About 15 years ago, Carlsberg Group had very little business outside of Denmark. We now have 98.5 percent of our business coming from outside Denmark. Of course, we would like to strengthen our business, including in China, even further. It should be done in a sustainable way, and in such a manner that we can continuously create value for shareholders, consumers and employees.

With the global economy slowing down, do you think that the current pace of globalization is in line with macroeconomic trends?

We must always adapt to a bundle of conditions, including the financial situation around the world. I am pleased to see that within the past five to 10 years, the importance of Asia has grown tremendously at Carlsberg. Five to 10 years back, Asia accounted for 5 percent of our business, but the same has climbed to 20 percent now.

At the same time, it's not a secret that Eastern Europe, which accounted for 50 percent of our global earnings in 2007, contributed only 28 percent of the earnings in 2014. This, to some extent, reflects the impact from some of the issues that exist in Russia today. So the important thing for me, as the chairman, is to hire the very best talent, including the best CEO, and hopefully he can hire a good team of professionals for Carlsberg. But a key attribute for all talent across the board is the ability to adapt to a changing environment.

What do you think is your biggest challenge right now?

To make sure that Carlsberg is managed well and is doing well around the world. You know, at the end of the day it's my responsibility to make sure that we constantly have the right management team. I must say I am very glad that we now have Cees Hart as our new CEO.

Hart has initiated a strategy process involving our top 60 people. He would like to take this group of 60 people to China for them to learn the speed of the development in China, and also, how e-commerce is gaining importance here.

How do you perceive the Chinese market?

I am very pleased to see how our business in China has been growing. Recently we acquired Chongqing Brewery, and we are currently integrating the assets. You should remember that Carlsberg is heavily reliant on its key international brands like Tuborg, Kronenbourg 1664, and the core part of our business in China is to actually grow our very strong local beer brands.

Beer is categorized into international brands and local brands that many people consider as their favorite. When I go and visit my friends in Chongqing, they like their Chongqing Beer. Carlsberg is already a very strong player in western China, and is gaining ground in Central China with the Chongqing Brewery acquisition.

I love China, but Chinese people are different to Danish people. So we have to adapt our products to different cultures wherever we are. That is why we have Carlsberg Light, Chill and Green Label brands in China.

Do you drink beer, and which brand is your favorite?

I have been traveling in China for the past eight days. Every evening after I finish work, I sit down and have a beer with a good friend, discussing what happened that day and what will happen tomorrow. I like Carlsberg and Tuborg. But I also like to sample local brands on my trips. So if I go to Chongqing I like to taste the different flavors of Chongqing Beer.

If you have one hour for yourself in China to relax and have fun, where would you go and what food would you eat?

I would take yet another walk on the Great Wall. I would probably have some very good local Chinese food. I really like Chinese cuisine. I like fish. I must admit that I sometimes eat too much here. But every morning when I get up, I run for half an hour to keep fit and slim. I have to run so I lose weight again, and most importantly, stay energetic.

What are your perspectives on wealth?

For me personally, I would like to do well, I would like to have a house, a car, and to go on vacations... Money is not what drives me.

I think what drives me is, of course, to do something good for society. Honestly I believe this is the core value of Carlsberg, that it is not only about myself, but actually about doing things for employees, customers and society.

Find more interviews at: http://www.chinadaily.com.cn/business/qaceo/

wangzhuoqiong@chinadaily.com.cn

(China Daily Africa Weekly 10/01/2015 page21)