SUDAN: SABMiller gets funding for local sourcing

SABMiller has hatched a plan to improve local sourcing for its brewery in Southern Sudan, a move that the brewer says will enhance local farmers' income and enable it to cut costs.

SABMiller said today (25 June) that it will invest US$2m to introduce a partnership scheme with smallholder farmers in Southern Sudan, where the brewer's subsidiary, Southern Sudan Beverages, opened a US$37m brewery in late 2008.

Farmers who join the scheme will be paid a pre-neogiated price for supplying SABMiller with cassava, a form of starch that can be combined with barley to produce beer.

The move is part of SABMiller's strategy to source more raw materials locally in Africa.

A combination of local sourcing and the use of cassava, which is cheaper than maize, will help SABMiller to reduce the price of beer and so lure poor consumers away from the black market for cheap alcohol; something that brewers have highlighted as a problem in many African countries.

Around 2,000 smallholder farmers are expected to join the Southern Sudan partnership scheme in its first three years.

"This project will convert what is currently a subsistence crop into a cash crop, creating valuable and sustainable economic opportunities in a fragile region where, after years of fighting, the land has been depleted and is unsuitable for many crops," said SABMiller's MD for Africa, Mark Bowman.

SABMiller is partnering with leading non-governmental organisation FARM-Africa to implement the initiative.

The brewer has also secured nearly US$1m in funding from the the Africa Enterprise Challenge Fund. This money will be used in addition to the brewer's planned $2m spend on the scheme.

The Peroni Nastro Azzurro brewer was praised on the scheme by the UK minister for international development, Alan Duncan. "SABMiller is helping farmers in southern Sudan through Farm Africa to move from subsistence to commercial farming and they’re providing a market for their produce," said Duncan.