PETALING JAYA: Heineken Malaysia Bhd
is investing in a new bottling line as part of a broader brewery modernisation programme to support the transfer of production from Asia Pacific Breweries Singapore (APBS).
Managing director Martijn van Keulen said the investment will enhance manufacturing flexibility and efficiency as Heineken gradually winds down brewing operations in Singapore and shifts some production to Malaysia.
“We will put a new bottling line on the side of the brewery. This is a high investment. It will be a top-notch modernised bottling line, giving us greater flexibility in production and different bottle formats going forward,” he told reporters after the group’s first-half (1H26) results briefing.
He said work on the new bottling line will begin in the coming months, while the group’s export activities remain on track to begin in the third quarter of financial year 2026 (3Q26).
Once the transition is completed, he said the full APBS portfolio – including bottled, canned and keg products – will be brewed in Malaysia and exported to Singapore.
“There is no specific brand that goes first or last. It is about phasing out production in Singapore and integrating it here in Malaysia,” he said.
Van Keulen added that the brewery has sufficient capacity to absorb the additional production, with the investment focused on modernising production lines rather than expanding capacity.
This comes as Heineken Malaysia reported weaker earnings for the 2Q26 ended June 30, which it attributed to softer consumer demand and a deliberate inventory normalisation exercise across its customer and distributor network.
Revenue for the quarter under review fell 19.5% year-on-year to RM434.75mil from RM539.73mil, while net profit declined 39.1% to RM50.53mil from RM83mil.
For 1H26, revenue decreased 15.7% to RM1.1bil from RM1.3bil in the corresponding period last year, while net profit fell 24.5% to RM154.99mil from RM205.15mil, as the lower cost base was insufficient to fully offset the decline in revenue.
Van Keulen said market conditions remain soft as consumers grow more cautious with their spending amid heightened geopolitical tensions in the Middle East.
“In our market here in Malaysia, we see that consumers are making different choices and are much more careful about where they spend their money,” he said.
He added that consumption patterns had also shifted towards off-trade channels, with more consumers opting to drink at home instead of visiting pubs and bars.
Van Keulen said the group had also optimised inventory levels across its distributor network as part of a demand-led inventory management strategy to better align stock levels with underlying demand.
Chief financial officer Jana Hanneman described the inventory reset as a deliberate move to position the business for future growth, despite weighing on short-term sales. “With the slower demand, there was a need to adjust the stock levels in the market. That also impacted brewery sales this year. It was a one-off adjustment that we deliberately took to set ourselves up for future growth,” she said.
Hanneman said the conflict in the Middle East had increased volatility in commodity prices, but the group was managing the impact through its global procurement network and commodity hedging strategy.
Despite the weaker performance, the brewer declared a single-tier interim dividend of 40 sen per share, unchanged from a year ago, representing a 78% payout ratio.
On new product launches, Van Keulen said the group’s innovation pipeline remained active, with new offerings to be introduced when they are ready.