Asahi Group Holdings, a Japan-based food and beverage group, today announced to integrate Asahi Group’s global, regional, and local procurement function in a new wholly owned subsidiary headquartered in Singapore.
Asahi Global Procurement Pte. Ltd. is set to commence operations in January 2024.
The subsidiary is geared towards fortifying the Group's procurement capabilities on a global scale by consolidating and integrating the procurement functions of the Asahi Group across various levels – global, regional, and local. The new entity will streamline category management and sourcing activities, particularly focusing on items that can be efficiently managed on a global scale. This includes preselected raw materials, packaging materials (including indirect products and services), and other resources where substantial synergies can be harnessed through a comprehensive Group-wide procurement approach.
In the current landscape, procurement activities have traditionally been managed distinctly across different regions and countries. However, with the inception of Asahi Global Procurement, a substantial transformation is anticipated. Over 90% of the Group's total third-party expenditures are projected to be directly managed by Asahi Procurement – a collective effort involving Asahi Global Procurement Pte. Ltd. along with integrated regional and local procurement teams. Notably, Asahi Global Procurement Pte. Ltd. will play a strategic role in actively influencing approximately half of the total third-party spend for the entire Asahi Group.
Through the amalgamation of the current Asahi Group's procurement teams into a unified Asahi Procurement function, the company aims to enhance overall operational efficiency and productivity. The overarching goal is to align with the highest standards of a modern Procurement organization, thereby ensuring a dependable and sustainable approach to procuring materials and services.
Asahi Procurement has set ambitious financial targets. Over a five-year period, starting from 2024, the organization strives to generate an average of at least USD 100 million in procurement savings annually. This will be achieved through diligent cost-saving measures, improved cost control, and mitigation of potential future cost escalations.
Beyond its financial aspirations, Asahi Procurement is also deeply committed to making a positive impact on global sustainability and proactive risk management. By fostering stronger collaboration with key strategic suppliers, the organization aims to create non-financial value. Initiatives encompass supplier-driven innovations, mitigating procurement-related risks (both commodity and non-commodity), and addressing critical sustainability issues, such as sustainable agriculture, climate change (scope 3), and circular economy principles.
This newly established organization is also poised to drive growth for the entire Asahi Group. By nurturing new capabilities and expertise within global procurement-related functions and workforce, Asahi Global Procurement will contribute to the Group's overall expansion and development.
Asahi Group Holdings has consistently pursued strategies to strengthen its business operations and enhance Group management. This move aligns with the company's broader initiatives, which include transitioning to a pure holding company structure, establishing Regional Headquarters, and implementing the Asahi Group Philosophy. The Group envisions the promotion of global procurement through Asahi Global Procurement Pte. Ltd. as a substantial milestone in reinforcing Group governance and bolstering the management platform that will support its long-term strategies.
Atsushi Katsuki, President and CEO at Asahi Group Holdings said:
“Asahi Global Procurement is the first functional organization of the Asahi Group to be integrated globally. We view this as an initiative to elevate our management to a new level and promote the advancement of overall management. We expect the consolidation of category management and sourcing functions on a global scale to not only create group synergies, but also contribute to solving various issues in the global environment and society, leading to the promotion of sustainable procurement.”
Tomas Veit, CEO at Asahi Global Procurement said:
“Asahi Procurement is the first truly global function within Asahi Group, and I am proud to be part of this unique opportunity where the Procurement function will drive and leverage the full potential of our organization’s global 3rd party spend. Now the key focus is on creating a strong and capable team to provide efficient and effective services for Asahi Group in the future. Our newly introduced operating model will also strengthen the partnership with our key strategic suppliers across the world with new focus on initiatives that will help us to expedite sustainability and our risk management agenda globally.”
