Affirming our commitments to agriculture and affordability

24 May 2012

In our Preliminary F12 full year results Africa has, once again, delivered a great performance.

Anyone who has been following the company for a while will know that a crucial focus for us in Africa is to create locally relevant, high quality beer brands which are affordable to people who would otherwise drink illicit or informal alcohol.

One of the ways we've been able to make great beers at a lower price has been to use locally-sourced raw materials, and we're doing more and more of it. In this financial year we launched ‘Impala' in Mozambique - the world's first cassava lager. We're sourcing much of the cassava from smallholder farmers in remote rural regions. We're also helping them to make their farms more productive, meaning that they grow enough food for their own families and have extra crops to sell on to us. For some of them, this is the first time they've ever had an income and it can make a big difference to their lives.

But we don't want to be their only customers. Introducing innovative, mobile cassava processing technology with the help of DADTCO (Dutch Agricultural and Trading Company), means that the cassava lasts longer after harvesting, and the farmers will be able to sell it to other commercial users.

The good news - for us and the farmers who we buy from - is that Impala has already achieved healthy volumes in its first six months and we have invested in upgrading the cassava brewing process, allowing further capacity expansion. In fact, we announced today that our Mozambican subsidiary, Cervejas de Mocambique, will be investing US$120m over the next three years to increase brewing capacity and to keep up with rapidly-growing demand for our beers.

Having cracked the challenge of processing cassava close to the farms using a mobile unit, the potential for other markets in Africa is significant. The first harvest of cassava from our project in South Sudan with FARM-Africa is due this year; and we're looking at other countries in the region to see how we could bring cassava into our value chain.

We're also involved in Grow Africa, a partnership which brings together the private sector and African governments to help them work together to boost investment and transformative change in African agriculture.  We have reaffirmed, in particular, our commitment to agricultural projects in Mozambique, Ghana and Tanzania and had some very productive discussions with representative ministries of agriculture at WEF Africa a couple of weeks ago.

These private sector objectives and multi-lateral discussions culminated in an announcement by Barack Obama last week of a new shared commitment between G8 and African leaders, with private sector support, to achieve sustained and inclusive agricultural growth and raise 50 million people out of poverty over the next 10 years - we're proud that our business is playing a role in supporting this.

Africa is an exciting continent with huge potential. Incomes and quality of life are improving and we want to be a part of that; building local value chains that create jobs and improve incomes and creating high quality, affordable beers that people can enjoy at the end of a hardworking day.