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Nov 16, 2012

Brewer expands its African beer production

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LUSAKA|SABMiller|Africa|Ghana|Lesotho|Malawi|Mozambique|Swaziland|Tanzania|Uganda|Zambia|Zimbabwe|USD|Club Pilsner|ℓ /y Plant|Supply Chain|Transport|Mark Bowman|Richard Farnsworth|Chibuku|Northern Zambia|South Sudan|Western Uganda
lusaka|sabmiller|africa|ghana|lesotho|malawi|mozambique|swaziland|tanzania|uganda|zambia|zimbabwe|usd|club-pilsner|-y-plant|supply-chain|transport-industry-term|mark-bowman|richard-farnsworth|chibuku|northern-zambia|south-sudan-region|western-uganda
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The world’s second-largest brewer, SABMiller, has invested $16-million over the last 18 months in the expan- sion of its 50-year-old African beer brand, Chibuku, into six other countries on the African continent. This investment has enabled the brand to be sold in more than double the number of markets where it was sold at the start of 2011.

The brand was initially sold only in Bot- swana, Malawi, Zambia and Zimbabwe, but is now also available in Mozambique, Ghana, Swaziland, Tanzania, Lesotho and Uganda.

SABMiller expects Chibuku volumes in the six new markets to total more than 500 000 h by the end of the financial year ending March 2013.

The brand’s expansion has created 200 new direct jobs at SABMiller’s Chibuku-producing breweries and a further 1 500 indirect jobs in the supply chain and distribution network.

Chibuku, which is sold in 1 cartons, is an opaque beer based on traditional African reci- pes and brewed using maize and sorghum.

It is a low-alcohol beer that ferments in the package, with the alcohol strength increasing from 0.5% alcohol by volume (ABV) on the first day of packaging to as high as 4% ABV on day five, before it expires. Given its short shelf life, it must be brewed and consumed in the country where it has been brewed.

Meanwhile, a new variant, Chibuku Super, was launched in Zambia in September. Chibuku Super is lightly carbonated and pasteurised, giving it a fixed alcohol content of 3.5% ABV.

Chibuku Super is sold in polyethylene terephthalate packaging. Its longer shelf life brings its distribution model closer to that of clear beer, which can be distributed in the rest of Africa.

SABMiller notes that Chibuku Super has been brewed successfully on a small commercial basis of 350 000 /y in Lusaka, Zambia, for the past 12 months.

A 250 000 /y plant was also commissioned in Kitwe, in northern Zambia, in September.

New Chibuku Super production lines will also be implemented in Mozambique and Zimbabwe by the end of this year.

Further, following successful pilot schemes in Ghana, Mozambique, Swaziland and Tanzania, construction work on full-scale Chibuku production facilities in these countries have started and will be commissioned by the end of this financial year, says SABMiller media relations manager Richard Farnsworth.

The Chibuku pilot plant in Lesotho, which was commissioned in September, will start commercial sales in the next few months, with possible plans to produce Chibuku Super in future.

In Mbarara, a town in western Uganda, construction work on a new 3.6-million hecto- litre plant began earlier this year and is expected to be commissioned in early 2013, says Farnsworth.

“The plant will initially produce Chibuku and other clear lagers, namely Nile Special and Club Pilsner, with the possibility of producing Chibuku Super in future,” he adds.

SABMiller says its expansion of Chibuku is part of its strategy to produce more affordable beers for lower income consumers in Africa and to reduce the often unsafe ‘informal’ alcohol market.


Meanwhile, the expansion also provides a guaranteed market for the smallholder farmers through which SABMiller sources the maize and sorghum used in production.

SABMiller’s Farming Better Futures initiative enhances the role that small- holder farmers in South Sudan, Zambia, Tanzania, Uganda and Mozambique play in the brewer’s value chains.

In the year ending March, SABMiller sourced maize and sorghum from about 40 000 smallholder farmers in Africa.

The farming projects involving smallholder farmers ensure that they have access to tools, skills, credit and markets to enable them to earn an income. It also creates jobs and ensures more food crops for local communities.

Further, by sourcing materials locally, SABMiller has a stable and cost-effective supply of crops from which to brew its beer. This enables it to reduce transport costs, shorten supply lines and ensure high-quality raw materials for the breweries.

“We have been investing heavily in growing capacity and staying ahead of demand in Africa. The expansion of our Chibuku operations illustrates how we are driving our affordability strategy and product innovation and maintaining the momentum of our Farming Better Futures programme through this continued investment,” says SABMiller Africa MD Mark Bowman.

SABMiller’s objective is to source, on average, more than 50% of materials from local markets over the next two years, rising to as high as 100% of materials in Uganda.

Edited by: Chanel de Bruyn
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