SABMiller announces new joint ventures with Castel Group in Algeria and Morocco
18 March 2004
SABMiller plc today announces the establishment of two separate joint ventures with its pan-African partner the Castel Group ("Castel") in the French speaking territories of Algeria and Morocco (collectively "the transaction").
The Algerian joint venture has been effected by SABMiller acquiring a 25% direct interest in two Castel carbonated soft drink plants and one brewery in Algeria, together with a 15.78% stake in a second brewery, in which Castel is a majority shareholder. The Moroccan joint venture has been effected by SABMiller acquiring a 25% interest in a holding company which has controlling interests in three breweries, a malting plant and a wet depot in Morocco. As a consequence of these investments by SABMiller and its existing 20% stake in Castel's operations in Africa, these joint ventures are effectively owned 60% by Castel and 40% by SABMiller.
The day-to-day operations of the joint ventures will be managed by Castel, which has a significant presence and expertise in French speaking Africa. The parties will co-operate in a number of important areas such as procurement and new technical initiatives, whilst drawing on the resources of the respective groups.
In the year ended 31 December 2003 the joint venture businesses included in the transaction generated sales of US$86 million, comprising 1.2 million hectolitres of lager beer and 900 000 hectolitres of carbonated soft drink.
SABMiller's direct investment in the joint venture businesses comprises US$25 million in the Algerian joint venture and US$21 million in the Moroccan joint venture. The initial impact of the transaction on SABMiller's earnings and gearing is expected to be neutral.
Graham Mackay, Chief Executive of SABMiller, said: "We are delighted to have the opportunity of cementing our strong relationship with the Castel Group of France through the establishment of the Algerian and Moroccan joint ventures. The pan-African strategic alliance between our groups has progressed from strength to strength, and the underlying operations have performed admirably in often challenging conditions."
Pierre Castel, Chairman of the Castel Group, commented: "It was always the parties' intention to enter into joint ventures where new opportunities could be exploited, and certain opportunities were earmarked at the time the strategic alliance was formed. We are pleased that SABMiller will join us in the development of these businesses which have significant potential, and also look forward to other joint ventures with SABMiller in Africa."
Notes to editors:
Algeria - Carbonated Soft Drinks
In Algeria the joint venture companies producing and distributing carbonated soft drink are Société de Boissons de l'Ouest, Algérien ("SBOA"), situated in Oran, and Skikda Bottling Company ("SBC"), situated in Skikda.
The size of the carbonated soft drink market in Algeria is approximately 5 million hectolitres per annum, 2 million hectolitres of which is supplied by smaller bottlers. The joint venture produces and distributes "Coke", "Fanta", "Sprite" and "Fresca" and commands a 31% market share among the larger distributors. The two joint venture carbonated soft drink companies have a capacity of approximately 2 million hectolitres per annum.
Algeria - Beer
The joint venture companies brewing and distributing beer are Société des Nouvelles Brasseries ("SNB"), situated in Oran, and Algerienne de Bavaroise ("Albav"), situated in Wilaya Taref.
The size of the beer market in Algeria is approximately 900 000 hectolitres per annum. The joint venture produces and distributes the brands "Shems", "Bavaroise", "Beaufort", "Castel Beer" and "33 Export" and already commands a 29% market share. The two joint venture brewing companies together have the capacity to brew 500 000 hectolitres per annum which could be increased by 200 000 hectolitres per annum with minimal additional investment.
Currently, there is low per capita consumption across both the carbonated soft drink and the beer industries with both industries facing good growth prospects.
The Algerian joint venture controls the entire issued share capitals of SBOA, SBC and SNB and 63% of the issued share capital of Albav.
Morocco - Beer
The joint venture company in Morocco is Marocaine d'Investissements et de Services ("MDI"), situated in Casablanca. MDI owns a 54% interest in Societe des Brasseries du Maroc ("SBM") a company listed on the Casablanca Stock Exchange which brews and distributes beer under the following brands "Castel", "33 Export", "La Gazelle", "Special Flag", "Stork", "Flag Pils", "Casablanca", "Kania" and a non-alcoholic beer "Crown". SBM also brews approximately 100 000 hectolitres of Heineken and Amstel under licence.
The size of the beer market in Morocco is approximately 1 000 000 hectolitres per annum with reasonable growth prospects over the next five years. The joint venture commands a 95% market share and has a capacity to brew approximately 1.3 million hectolitres per annum.
SABMiller plc is one of the world's largest brewers, with 2002/03 lager volumes in excess of 115 million hectolitres. It has a brewing presence in over 40 countries across four continents and a portfolio of strong brands and leading market shares in many of the countries in which it has brewing operations. Outside the USA, SABMiller plc is one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2003, the group generated US$770 million pre-tax profit from a turnover of US$9,112 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
VP of Investor Relations
Tel: +44 (0) 20 7659 0119
Mob: +44 (0) 7717 428540
Head of Corporate Communications (Finance)
Tel: +44 (0) 20 7659 0105
Mob: +44 (0) 7799 894265