SA Breweries moves into Ethiopia, Uganda.

Author:Ross, Priscilla
Position:South African Breweries Ltd

South African Breweries (SAB) is investing nearly $70m in two separate deals in Africa. Firstly a new brewery will be built in Addis Ababa in a joint venture with the Ethiopian Investment Authority (EIA), and secondly SAB is acquiring a 40% stake in Uganda's Nile Breweries Limited for $29m in cash.

SAB has already established itself firmly within the sub-Saharan Africa region through its existing network of breweries located in Swaziland, Lesotho, Botswana, Zimbabwe, Mozambique, Zambia, Tanzania, Kenya and the home base South Africa.

The EIA has approved the investment through a joint venture between South African Breweries International Africa for a 49% holding including management control - and the International Beverage Corporation, an organisation owned by Ethiopian nationals with a 51% stake, for the construction of a greenfield brewery close to the city of Addis Ababa.

The commissioning of the brewery, which will have an initial capacity of 500,000 hectolitres a year, is scheduled for May 1999. A total of 500 new jobs will be created by this investment, whilst a multiplier effect attributable to the creation of new jobs at distribution, supplier and retail level should boost the number of additional job opportunities to about 5,000.

An agreement is envisaged for the new brewery to produce Castle Lager as the premium brand under licence from SAB.

At present three state-owned breweries operate in Ethiopia. It is expected that these will only be subject to privatisation some time in the future.

SAB has also...

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