Graduation Project MBA

1. 1 Al Ahram Beverages Company.

2. Organizational Culture of Al Ahram Beverages Osama Fawzy Asmaa Yasser Hossam Elgamel Khaled Abd Allah Sally Diab Hanan Nabil Ayman Salah 2

3. History Al ahram beverages Company was established more than 110 years ago. Al Ahram Beverages Company - ABC was successfully privatized in 1997 when Mr. Ahmad Zayat bought the government's stake in the company. Since its privatization, ABC built on its monopoly position in the local market to expand its activities into a full-fledged range of beverages including beer, wine, and non-alcoholic carbonated and other soft drinks. 3

4. History The new strategic plans include also the development of ABC activities in the Middle east and the Arabian Peninsula. Benefiting from a strong brand name in the local market, and a monopoly position, ABC was a cash cow for the Egyptian government, production driven, with no marketing focus and bad quality beer.

5. History By buying its only competitor in the local market (El-Gouna Beverages) for EP 255 million, ABC confirmed its full coverage of the local market, buying the remaining 15% of the beer market and 35% of the wine market. 5

6. Production Capabilities Production in Five Plants Non-alcoholic beverages NAB in (Sharkeya) producing Birell & Fayrouz cans. Non-alcoholic beverages NAB in Badr City producing Fayouz bottles/PET and Amstel Zero. Malt (roasted barley) in 6th. Oct. city Alcoholic beverages AB: wines and spirits in Gianaclis Alcoholic beverages AB: in (El Obour City). 6

7. Distribution Capabilities The distribution network covers most of the Egyptian land, with a fleet of 500 trucks, 78 warehouses and 1200 salespeople. 7

8. Products of Al Ahram Beverages Company. 8

9. History In 2002 recognizing the strength of ABC’s business and global potential, Heineken International acquired ABC for a total enterprise value of $ 360 million. The acquisition was one of the successful privatizations of the GoE. ABC has also signed a deal with SDAFCO (Saudi Dairy & Foodstuff) for the distribution of its non-alcoholic products in Saudi, Bahrain, Kuwait and Qatar 9

10. ABC Vision ABC will continue to be the most profitable beverage company in Egypt. The superior range of local and international brands will be the first choice of the consumers and customers and will deliver growth and value This will be driven by a culture of enjoyment and passion for people and quality 10

11. ABC Employees Number of employees before 2002 : 6000 Number of employees after 2006 : 3000 The structure of employees now comprises of : 60% rehabilitated public sector employees 40% freshly recruited private employees 10 persons expatriates (Dutch, German) 11

12. Ahmed Tatawy I started working at Al Ahram Beverages Company (Heineken Egypt) and I am still there, now started off as an Alpha Team member, which is a management trainee position with the CEO, then I took over the operation for Drinkie's (the retail arm for ABC) with another colleague and most recently I have been given the task to start up a Customer and Consumer relations department, making me the Customer and Consumer Relations Manager!. 12

13. ABC Employees Split 40% work at AB 60% work at NAB 20% ladies mostly in HQ 80% men working in production plants and HQ. 83% Age range from 23 – 35 13% Age range from 35 – 48 4% Age range from 48 – 62 68% unmarried

14. ABC Challenges Retaining employees in NAB and AB Selecting employees for recruitment. Withdraw cultural differences inside the organization. Career path CSR

15. ABC Overcoming Challenges Management by objectives International rotation program Overcoming the salary gap between public sector employees and the private.

16. Employee Contradictions, Dilemma Working in an Alcoholic company Signing a contract to work in the entire organization (NAB & AB)

17. Employees Overcoming Contradiction & Dilemma Fatwa to work in the company since there is no alternatives. The involvement in achieving tight targets.

18. Organizational Culture at ABC Heineken implemented several internal system programs to adapt employees to the international culture of the organization. Heineken reinforced a Hunt for cash strategy and involved all employees in this strategy.

19. Organizational Culture at ABC On the other hand Heineken adapted to the country’s culture, values and beliefs (Islamic, conservative) Heineken adopted Personality – Culture – Fit in recruiting new candidates.

20. Interview with a Senior Manager in ABC Objectives of the interview: - To have an in-depth knowledge of ABC’s culture. - To have a feedback from a senior manager in relation to the organization.

21. Interview with Eng. Alber F. Shenouda BSc. Mechanical Engineering – Cairo University. Masters in Management – Köln University – Germany. Position: Procurement Manager in ABC