Carlsberg Malaysia eyes Asian acquisition

KUALA LUMPUR, April 21 (Reuters) - The Malaysian unit of Danish brewer Carlsberg is taking advantage of the current economic downturn to hunt for an acquisition target in Asia, the head of the unit said on Tuesday.

"We are at the stage of doing analysis on certain opportunities. The board has given us a time frame to identify some opportunities," said Soren Jensen, managing director of Carlsberg Brewery Malaysia.

The brewer had interest-bearing cash of about 227 million Malaysian ringgit ($62.19 million) as of end-2008, and is unafraid of gearing up over and above that cash position to acquire a suitable target, he said.

Jensen declined to discuss specific acquisition targets, but said the brewer is not ruling out Malaysian companies, or one outside the alcoholic beverage industry.

Carlsberg surprised its investors in February when it decided not to pay a special dividend for 2008, preferring instead to conserve cash for potential acquisitions.

The brewer is targeting high single-digit revenue and operating profit growth for this year, Jensen said, although raw ingredient costs are expected to stay high.

"We are definitely budgeting for a revenue and profit increase this year but whether we can achieve that remains to be seen," Jensen told Reuters in an interview.

Last year, the brewer faced high malt and hop costs, after their prices rocketed by 300 percent and 500 percent respectively in the middle of the year.

To counter the high raw material prices and the unfavourable dollar exchange rate, brewers in Malaysia raised prices by an average of 3 percent for some brands and products last week.

"One of the big challenges the industry has been facing is the rise in input costs. By not passing on these costs (to consumers) in the last few years, we're feeling a big squeeze," he said.

Carlsberg's performance in the quarter just ended was affected by slower consumption and the timing of the Lunar New Year, traditionally its strongest period, which fell in January this year.

"It was a tough quarter due to several factors. One was the economic slowdown and the other was the timing of the Chinese New Year, which was unfavourable to us," said Jensen, who has been in Malaysia for two years.

The company will also postpone capital investments and look at reducing administrative costs.

"We have not done any staff reduction but we are being much more critical about filling vacancies," he said.

Carlsberg, one of two leading brewery companies in Malaysia, is expected to report net profit of 78 million ringgit for 2009, according to Reuters Estimate.

Carlsberg's share price has underperformed the market this year, rising 1.11 percent against the benchmark index's 10.25 percent gain. (Editing by Rupert Winchester)