SABMiller plans $34m brewery on rival Nambrew's turf

The London-based company said the US$34m investment would expand what it claims is a 22% share of an 860000-hectolitre market.

“SABMiller's strategy over the last few years has been to invest significantly in Africa and this is an extension of this approach,” spokesman Jonathan Oates said.

SABMiller, the world's second largest brewer by volume, is racing against rivals Heineken and Anheuser-Busch Inbev to carve out space in the world's rapidly developing emerging markets.

The company spent $340m last year building four breweries in Angola, Tanzania, Mozambique and southern Sudan.

Its total expansion spend for the year — to be confirmed when it reports annual results next month — was about $1,25bn.

SABMiller last year announced it had won a licence for the brewery. Construction will begin in the second half of this year. It is just one-eighth the capacity of the company's smallest South African plant, the 1,8-million hectolitre Polokwane brewery.

But while Namibia is small, with only 2,1-million people, it neighbours oil-rich Angola, with 12,8-million people, and a country in which SABMiller is expanding. A future role for the new Namibian plant could be to export to a growing Angolan market.

“If there's any spillover, this could go into Angola as well,” said Anthony Geard, an analyst at Investec in Cape Town.

Nambrew welcomed the investment and increased competition, but disputed SABMiller's claimed market share.

“There is currently no official industry or retail information source, so SABMiller's market share claim is therefore subjective in nature,” spokesman Patrick Hashingola said on Friday.

Source: Business Day