just On Call: SABMiller readies Africa building boom
SABMiller performed well in Africa in its FY results
SABMiller will likely go ahead with three building projects in Africa this year, while expansion in Nigeria is to come under review “quite soon”, the company's new CEO has said.
Alan Clark, who took over from Graham Mackay last month after Mackay underwent surgery on a brain tumour, told analysts in a call today (23 May) the group will build a brewery in Ghana and expand its footprint in South Sudan. Clark also said SABMiller “will probably” construct a maltings plant in Zambia.
The news comes on the back of a strong performance from Africa in full-year results released today, with SABMiller posting a 5% increase in group sales and a 13% jump in operating profits on the continent. South Sudan saw a double-digit boost in lager volumes, while in Ghana and Zambia volumes were up by 15% and 13% respectively. However, it was Nigeria that proved the biggest surprise, with lager volumes growing “significantly” despite rival brewers highlighting softness in the country. Last month, Diageo said Nigeria showed “consumer weakness” in its Q3 results and Heineken saw volumes in the country fall by mid-single digits in Q1.
Clark said: “We are seeing ourselves in the somewhat fortunate experience in our Nigerian business, which has done very well, and that's probably something that will come onto the radar quite soon - how we want to expand capacity in that area.”
SABMiller has already increased capacity in Nigeria through the commissioning of a greenfield brewery in Onitsha in August last year, the group said. Capacity also increased in Zambia through a brewhouse at Ndola that was commissioned in November, while South Sudan was earmarked for expansion in 2011.
Clark said today that the bulk of the brewer's $1.7bn investment earmarked for the forthcoming financial year will go into Africa and Latin America.
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