U Thein Tun, aka ‘Pepsi Thein Tun’, 77, is chairperson of a group of 13 companies employing 4500 staff. His organisation, the Tun Foundation, donates K1 billion (US$1 million) to charity every year.
Q: You’ve been in business since 1961. In 1991 you brought Pepsi to Myanmar but it was a turbulent ride. Could you tell us about that?
A: We started producing soft drinks in 1991 as Pepsi-Cola Product Myanmar Ltd. After 1996 we faced economic sanctions due to the political situation and Pepsi pulled out in 1996-97. It was a very hard time for us … Fortunately, I found a way to buy cola concentrate from America.
Q: Was Star Cola your first brand after Pepsi left?
A: Yes. We started Star Cola in 1997. First Star Cola, next Quench and Orange. At first it wasn’t possible to buy these brands, which is why we established a company in Singapore to do so.
Q: What is Myanmar’s food and beverage industry like in 2013?
A: Our country is producing a number of quality drinks today. But we have to learn from the international brands step by step. The food and beverage industry needs brand building, distribution coverage and customer service. Now that internationally famous brands like Pepsi and Coca-Cola have returned to Myanmar, local brands have to be able to match them in quality. If we can’t do that, local brands will lose their market share.
Q: Do you see any other problems or challenges facing the industry?
A: As Asian people are now becoming more health-conscious, they’re consuming sweet foods and drinks less often. I think it has been about four years now that the market has been in decline.
Q: What do you think will happen in the next five years?
A: I think the industry will strengthen, albeit slightly. But it cannot be a high-speed growth like before. Consumers care about healthy drinks. The per capita consumption rate of soft drinks in Myanmar is still lower than in America and Europe so there is great potential for improvement.
Q: What is needed to develop the industry over the next five years?
A: In our country, the packaging industry needs to develop, because it remains much less productive than it could be. Sometimes packaging costs more than production and that’s not right. Affordability for consumers depends on the packaging rates industry-wide. If we cannot beat [international brands] in branding and in packaging costs, we may hit a snag in the long term.
Q: You founded the Aung Nyunt Swe company in 1961, just before the country became a socialist one. You brought Pepsi here in 1991 and then it left soon after. Now it’s back, but as your competitor. How do you cope with the ups and downs of big business?
A: In life, you should have more than one pillar. If you fail in one area, other pillars can support you. I turned to real estate when my soft drink business wasn’t going well and I consider this type of business strategy a sound one.
Q: What other types of business are you involved in, besides soft drinks, real estate and banking?
A: I’m also developing hotels and tourism projects. I have started building hotels in Yangon, Bagan and Inle Lake.
Q: What would you say about the distribution infrastructure of the food and beverage industry now?
A: Myanmar businesspeople are learning more than ever before about distribution, but we still don’t have enough logistical organisation. We need to develop that to have proper distribution connections.
Q: How many brands of soft drinks you are producing right now?
A: Star Cola, Quench, Crusher, Crusher Soda, Quench Soda – altogether five categories.
Q: Are you collaborating with international brands – namely Pepsi?
A: I have signed a 49 percent share ownership agreement with Carlsberg beer. We [Myanmar Golden Star and Pepsi] are still thinking about business relations. I am also in discussions with other foreign investors.
Q: Do you think these foreign food and beverages investors should run health campaigns?
A: Yes I do believe that’s important and needs to happen. Corporate Social Responsibility requires investors to take care of their communities. It’s a global concern. Businesses worldwide are considering this issue when they start any business investment. They need that kind of campaign to succeed.
Q: Do you have any advice for budding entrepreneurs?
A: You should try to know the rich when you are poor and to know the poor when you are rich. Myanmar is one of the last frontiers in the world’s economy. It is very, very valuable but perspective is important.