Afica & Asia: SABMiller’s Africa-Asia business accounts for 28.95 percent of the Group’s total lager sales

Since 2002 SABMiller’s Africa-Asia business has almost doubled reported volumes and more than doubled turnover. For the financial year in Africa alone, earnings per share have increased by 33 percent, the volume of beer has grown organically by 4 percent. Turnover is up by 15 percent and earnings before interest, tax and amortisation have improved by 27 percent, Business in Africa released August 07.

Interim results released in March this year paint a picture of robust growth: total revenue for Africa and Asia is $2,221bn, and rising.

SABMiller CEO Graham Mackay attributes the bullish run to improved economic stability in most of the 29 African countries in which SABMiller has financial and beverage interests.

“It’s clear that even in an area of the world which is seen as high risk, the net effect of the portfolio has been steady growth,” he tells shareholders. “Economic stability, which is on the increase, is playing an important role: incomes are rising and investment in infrastructure is improving. That’s driving the demand and, in turn, the volume of beer we sell in Africa.”

For years, SAB plodded on in an insular South African market restricted by trade and financial sanctions during the apartheid era.

“The first thing we did, following a damaging strike in the late 1980s, was to institute management and performance-based programmes with the help of US consultants, which pushed ownership down the organisation, espoused concepts like ‘you are the boss of your job’, not just the executive but the operator down the line, and armed workers with multiple skills down the line. That was the start of building a performance culture in the Group which is still alive and well, and which is pretty much behind a lot of our success,” André Parker, the Group’s ebullient MD responsible for Africa-Asia commented.

Looking ahead for Africa, Parker expects mid-to single-digit growth in organic volumes over the medium term, with pricing expected to remain flat in real terms.

Future “A Team” players are Tanzania, Zambia, Mozambique and Angola. The Group’s cash cows include Swaziland, Lesotho and Malawi. Zimbabwe is a problem, with tough but positive results in Uganda and Ghana.

“Going forward, I hope that favourable economic prospects in the continent as a whole will create more affluent consumers. I hope also to lower the price of beer at existing margins through raw materials substitution, for covenience to introduce one-way packs and gain further clear beer market share and traditional beer expansion,” Parker commented.

According to Parker, SABMiller’s Africa-Asia division now accounts for 50.95 million hl or 28.95 percent of the Group’s total lager sales volumes. The division’s turnover reached almost US$2.22bn for the previous financial year, with an EBIT margin of approximately 19 percent and rising.

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