Africa and Asia

View the film on the opportunities and challenges in Africa

History:

SABMiller’s expansion in Africa dates back to 1910 when SAB invested in Zimbabwe (then Rhodesia). In the early 1980s SAB expanded into Botswana, Swaziland and Lesotho, and in the 1990s into Uganda, Tanzania, Zambia, Malawi, Angola, Mozambique and Ghana. The pan-African strategic alliance with Castel was agreed in 2001, offering economies of scale and the opportunity to invest in new African markets. In 2004 this partnership formed a new JV in Algeria and Morocco.

In 1994 a joint venture in China was formed with China Resources Enterprise Ltd, China Resources Snow Breweries (CR Snow). SABMiller is the only international brewer in China with a single, nationally integrated footprint and management team. SABMiller’s move into India began in 2000 through the acquisition of Narang breweries, and in 2003 a JV with Shaw Wallace & Company Ltd became one of India’s leading brewers.  SABMiller acquired the remaining share of the JV in 2005, now holding 99%.

SABMiller’s Africa and Asia division includes Africa (excluding South Africa), China and India. In Africa it has brewing (including traditional African sorghum beer) or beverage interests in 29 countries. This includes 18 countries through a strategic alliance with the Castel group, and several countries where SABMiller is a Coca-Cola bottler, including Angola, Botswana, and Zambia. Volumes in F2006 amounted to 96.2m hl lager, 4m hl soft drinks, and 13m hl other beverages.

Current business:

In most of its African and Asian markets SABMiller holds a #1 or #2 position. There is scope for consumption growth in all these markets, particularly in light of good economic growth in Africa, so the focus is on expanding beer’s share of alcohol by introducing clearer brand segmentation, including more affordable brands, and broadening distribution to more rural areas. In China, CRSnow is now the largest brewer, and its national brand, Snow, is the country’s top-selling beer (over 51m hl) and one of the fastest growing brands in the world. Good progress has been made integrating the recent acquisitions, and the first phase of a greenfield brewery in Dongguan was completed in early 2006. In India, where SABMiller is the second largest brewer, volumes are growing satisfactorily although the business is still restricted by the lack of regulatory reform.

Future strategy:

The businesses in Africa continue to grow and we see plenty of opportunity to further strengthen our brand portfolios, in-trade investments and execution, and improve efficiency in the relatively undeveloped African markets. For example, expanding Eagle (a subsistence level sorghum beer) to other countries, and finding opportunities to expand selectively within Africa. In China, CRSnow continues to concentrate on creating more efficient routes to market, developing brand equity, and achieving the scale to realise production efficiencies and improved pricing. In India we will continue to improve our business model and work with the government for regulatory improvements. We have also announced an arrangement with a local distribution partner to build a greenfield brewery in Vietnam, one of the fastest growing beer markets in the world, due for completion by the end of this year.