Breweries’ Profit Reflects Ability To Adapt Across Africa

Breweries’ Profit Reflects Ability To Adapt Across Africa

From Independent Online.

South Africa-based SABMiller, one of the largest beer companies in the world, announced a 20 percent profit for the year ending in March, led by sales of premium brand Castle Lite.

How South African Breweries expanded business out of South Africa and across the continent in often-challenging environments is a story of “persevering, improvising, working with local communities and being able to ‘make a plan,’” according to a report in Independent Online.

SABMiller Africa’s corporate affairs director, Hloni Matsela, was interviewed by Independent Online at the recent World Economic Forum on Africa summit.

In many African countries, SABMiller is self-reliant when it comes to electricity, Matsela said.

In Uganda it is piloting a mobile spaza shop (convenience store) which runs on electricity from a solar panel that supplies energy to run fridges and lights.

SABMiller tries to buy starch from local suppliers for beer-making. This raises the potential for local consumption and builds engagement with local communities, Matsela said.

In Mozambique, the company helped 1,500 small farmers who are growing cassava as a source of starch for SABMiller.

This helps develop local communities and provides cheap raw material, Matsela said.

Infrastructure was a key area of focus in discussions at the World Economic Forum.

Lack of roads in particular holds back development for SABMiller in Africa, Matsela said. “Roads are probably the most critical aspect of infrastructure,” he said. “They are a catalyst for other development. There are certain things a business can compensate for… if there is no electricity you can ‘make a plan’ but it is very difficult for private business to build roads.”

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For some businesses such as banking, technology may lessen the impact of poor infrastructure, Matsela said. But for most businesses, roads are needed to transport materials.

“The infrastructure issue tends to be inter-related. If there are no roads then it’s likely there’s no electricity and little or no banking.”

Poor infrastructure tends to be accompanied by increased opportunity for corruption, he said. Business people are forced to negotiate the challenges of spending a few days travelling just a few hundred miles or trying to deal with heavily congested ports.

Adapting to local conditions is a hallmark of the company’s business style, Matsela said. “We’ve learnt a lot of lessons from South Africa, which are applicable in many of our other global operations.”

Read more at Independent Online.