Castle lager selling well in Zambia - SABMiller

Castle lager selling well in Zambia - SABMiller

SABMiller's Zambian Breweries plans to raise US$70m via a share rights issue in order to expand production capacity.

Zambian Breweries, which is wholly-owned by SABMiller, plans to use the funding to expand brewing capacity at its Ndola plant in the country. The move is part of SABMiller's wider strategy to capitalise on the potential for beer across much of Africa.

An SABMiller spokesperson told just-drinks today (7 November): "Zambia has received relatively modest investment in recent years in comparison to some of our [other] African businesses, so we're ensuring that we have the funds we need to adequately service the local market." 

Per capita beer consumption in Zambia is around seven litres, which puts the country slightly below the average for Africa has a whole, according to Plato Logic figures supplied by SABMiller. The brewer has a 90% share of the market in volume terms.

Beer sales in Zambia have risen strongly since the country's Government agreed last year to cut duty tax on clear beer by 75%. In its most recent trading update, published last month, SABMiller reported that its volume sales rose by 22% in Zambia for the first six months of its current fiscal year, to the end of September.

It attributed the rise to strong demand for Castle lager and good economic conditions. In the group's previous fiscal year, its lager volumes in Zambia rose by 28%, to 906,000 hectolitres, thanks to a particularly strong final quarter.