SABMiller PLC is planning a $100 million extension to its brewery in Ghana, the latest advance by a major brewer in the scramble to expand in Africa, the world’s fastest-growing beer market.
SAB is doubling the capacity of its existing brewery in Ghana when work begins next year, the brewer’s managing director for Africa, Mark Bowman, told The Wall Street Journal. The move will enable it to increase production of Club Ghana, the country’s most popular local beer, as well as providing a base for distribution of international brands such as Peroni Nastro Azzuro.
The move underlines the intense competition among major brewers to reach new drinkers in Africa, where rising wealth and urbanization is driving demand for beer and spirits. There will be 65 million more legal drinkers in Africa by 2023, according to the African Development Bank.
SAB—the world’s No. 2 brewer by sales, after Anheuser-Busch InBev SA BUD -0.16% —is increasingly reliant on Africa. In its most recent financial year, the continent contributed more to earnings than Europe for the first time. In the six months ended Sept. 30, African beer volumes—excluding South Africa—increased 9% and earnings before interest, taxes and amortization rose 16%.
Africa has long been dominated by four international drinks companies—SAB, France’s Castel Group, Diageo DGE.LN -0.42% PLC and Heineken HEINY -0.03% NV—while thousands of local and home brewers occupy the lower-priced and illegal end of the market. SAB owns a 20% stake in Castel’s African beer operations.
Written by Peter Evans | Read more at The Wall Street Journal
