Professor Ethan B. Kapstein of INSEAD reports on SABMiller’s economic contribution in Ghana
8 June 2011
SABMiller plc, one of the world's largest brewers, today releases a report by Professor Ethan B. Kapstein of INSEAD, which reveals the economic and social contribution made in Ghana by its subsidiary companies, Accra Brewery Ltd (ABL) and Voltic.
The study estimates the ‘value-added' (a metric that takes into account broader economic measures such as household income, tax revenues and company profits and savings) to the Ghanaian economy by ABL and Voltic, both through direct contributions from the companies' operations and the indirect contributions of suppliers and distributors working with them in the region. It also quantifies the potential negative impact to the Ghanaian economy in the event that ABL's and Voltic's local operations were to shut down.
One of the most substantial findings of the report is the job multiplier effect. SABMiller employs 850 people in Ghana - 400 through ABL and 450 through Voltic. However, when jobs supported through the entire value chain, including suppliers, distributors, and smallholder farmers are considered, for every person directly employed by Voltic or ABL, a further twenty jobs are supported in Ghana. In fact, the two companies are responsible for at least 17,600 jobs across the economy - equivalent to 0.2% of the labour force.
Other key findings from the report include:
- ABL's and Voltic's operations in Ghana add economy-wide value of US$117m, the equivalent of 0.4% of Ghana's GDP. The direct contribution of the two companies is US$31.7m, which is equivalent to 0.1% of GDP and includes a US$9m contribution to local households through salary payments alone
- ABL and Voltic are significant contributors to the Ghanaian economy through tax contributions. Direct contributions of US$22.2m equate to 0.5% of total tax income and economy-wide contributions of US$45.7m represent 1.1% of the country's total tax income
- If ABL and Voltic were to cease production in Ghana, the Ghanaian economy would suffer a loss of US$22m in value-added through measures such as household income and tax contributions. In addition, 5,100 jobs would be lost across the country
SABMiller CEO Graham Mackay said: "It is a simple fact that businesses succeed when they are embedded in buoyant economies and thriving communities. This report shows that a company's economic contribution is far broader than headline numbers and demonstrates the ripple effect of private investment across the economy. For businesses, this investment in local communities is key to ensuring their competitive advantage: underpinning broader growth and investment, which in turn benefits the organisation."
The report looks beyond numbers at the two companies' sustainable development programmes, which focus on health, education and the environment. Current projects include providing schoolchildren with transport to and from their lessons in Koforidua, Aboabo and Ada and providing free health screenings and medical treatment to members of the community in Adabraka. In addition, ABL sources from local farming groups to ensure the availability of raw materials. In fact, in 2010 ABL guaranteed the price of 2,000 tonnes of locally sourced maize, giving local smallholders certainty and allowing them to plan and invest for the future.
Professor Kapstein uses the learnings from the study to make recommendations to ABL, Voltic and the Ghanaian government, urging them to:
- Recognise the fact that ABL and Voltic make a substantial local impact on Ghana's economy: prompting ABL and Voltic to consider making business decisions that increase that impact; and prompting the Ghanaian Government to consider public policy decisions that could enable all businesses to do more
- Ensure that Ghana remains an attractive investment proposition for national and international businesses in the private sector
- Consider the impact of expanding the brewery's operations and local agricultural sourcing initiatives and look for ways to bring about such expansion
Professor Kapstein, INSEAD, said: "This report demonstrates the full spectrum of benefits that an organisation can bring to a local economy - from supporting jobs throughout the economy to enabling Governments to improve local services through their tax contributions. By better understanding how they interact with the local economy, ABL and Voltic will be able to maximise their positive contribution, ensuring future growth and prosperity and as a result, their continued success. At the same time, the Government of Ghana needs to continue to develop an environment that is conducive to business investment and expansion."
A full copy of the report, and details of Professor Kapstein's report looking at SABMiller's economic and social contribution to Uganda and Honduras are available at www.sabmiller.com/reports.
Notes to editors
SABMiller plc is one of the world's largest brewers with brewing interests and distribution agreements across six continents. The group's wide portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the world's largest bottlers of Coca-Cola products.
In the year ended 31 March 2011, the group reported US$4,491 million of adjusted pre-tax profit and group revenue of US$28,311 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.Enquiries:
|SABMiller plc||Tel: +44 20 7659 0100|
|Beth Longcroft||Business Media Relations Manager, SABMiller plc||Tel: +44 7425 621030|
|Bianca Shevlin||Corporate Media Relations Manager, SABMiller plc||Tel: +44 7901 997340|