SABMiller brings war to NBL’s own turf
Windhoek – South African beer giant and one of the world's leading brewers, SABMiller, is taking competition to the doorstep of its fiercest rival in southern Africa ‑ the Namibian Breweries Limited (NBL).
After being denied permission to open a brewery in Namibia for many years in attempts to protect the local breweries, the Namibian government relented in 2010 and gave permission to SABMiller and its black economic empowerment partners to construct a brewery in the country.
Construction of the brewery at Okahandja north of Windhoek will start in April this year with a production capacity of 260 000 hectolitres.
The brewery, which should be operational in 18 months, will be built on a space planned to accommodate future growth.
In addition, the company plans to invest in a 750 ml returnable bottle packaging line and warehousing facilities. The estimated investment is R360 million.
SABMiller MD Mauricio Leyva says the project had reached an important milestone.
“We are most pleased that we are now going to be moving ahead with the construction of the brewery.
“The local brewery will not only enable us to make more of our key brands available to consumers in the Namibian market, but it will also make a meaningful contribution to the Namibian economy once it is up and running.
“Jobs will be created, our environmental impact on the country will be reduced as we shift to returnable bottles and we will build on our existing programmes to uplift the local community.”
In 2010, SABMiller announced the establishment of SABMiller Namibia (Pty) Ltd to house its operations in the country.
SABMiller Namibia will be 60 percent owned by SABSA Holdings (Pty) Ltd, a wholly owned subsidiary of SABMiller, and 40 percent by local Namibian partners comprising 20 percent Onyewu Investments (Pty) Ltd and 20 percent owned by three charitable trusts.
Leyva says the formation of the new entity allowed for the allocation of a sizeable shareholding to local partners for nominal consideration, which was an important empowerment initiative.
“With a brewery on the ground in Namibia, there will be social development contributions via the broad-based black economic empowerment shareholding trusts, which will benefit local communities through education, community health and poverty alleviation initiatives,” he says.
SABMiller has an estimated 22 percent of the Namibian market with popular brands, including Castle Lager, Carling Black Label and Castle Lite.
In the South African market, where the two companies are also part of a fierce rivalry, Namibia Breweries is in the process of finalising negotiations with Heineken and Diageo, for the Namibian company to obtain a stake in the Sedibeng Brewery in Gauteng in South Africa, via the South African joint venture, DHN Drinks, under which the three companies operate in South Africa.
Namibia Breweries is one of Namibia’s best performing private companies. In the financial year ended June 30, 2012, turnover grew by 20 percent to reach R2.2b. Operating profit grew by 14 percent to reach R429m.
Apart from South Africa, Namibia Breweries exports to a number of African countries, including Cameroon, Uganda and Zambia.
The company is listed on the Namibia Stock Exchange (NSX).
The company’s brand portfolio includes leading brands such as Windhoek Lager, Tafel Lager, Windhoek Draught, and Windhoek Light.
NBL is also the distributor of Diageo-owned ready-to-drink-beverages (RTDs) and ciders in Namibia.