Our Priorities: Enterprise development
'Promoting local sourcing'
In procuring its raw materials, SABMiller combines the scale advantages of global sourcing with the recognition that using local suppliers can also benefit the business.
Local sourcing means zero import duties and shorter, more secure supply chains while encouraging enterprise and contributing to the local economy on which every SABMiller business depends.
Our aim is two-fold:
In Tanzania, we've established a project to evaluate the commercial viability of large-scale local barley malt production. Currently, local farmers are only able to produce 10% of our requirements. This project aims to increase the figure to 50% by 2011 through a partnership of commercial farmers and 700 smallholders converting from subsistence farming.
Our local approach has allowed us to evaluate the use of alternative crops that can be used to brew beer. In Africa we've started to develop a range of new products based on locally cultivated crops such as sorghum and cassava. Last year we reported on our work in Uganda and the development of Eagle Lager, which is now one of Africa's largest beer brands. As well as promoting local sourcing and working with smallholder farmers, we were able to create a more affordable product for our consumers and an alternative to traditional home brews.
A potential switch to cassava to replace all adjuncts – additional ingredients added to supplement the main brewing mash to enhance the characteristics of the beer – in our African brands could deliver over US$3 million in savings each year as well as promoting the growth of commercial farming among smallholder communities. A study tour in July 2009 to assess the commercial viability of growing and processing cassava in Angola has shown promising results. It's estimated that up to 1,000 small-scale farmers would be needed to meet the demand of a new brewery.
During the past year, we've been awarded just under US$1 million from the Africa Enterprise Challenge Fund to help build the cassava supply chain in Southern Sudan in partnership with the NGO, Farm Africa.
In Peru and Ecuador, we're working with local suppliers to develop high quality, local supplies of maize and rice to replace imported crops. In India, the business is working with over 9,000 small-scale barley farmers to improve their yields and quality, enabling them to meet more of SABMiller's requirements while also boosting their incomes.
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