FDBusiness.com

SABMiller is to invest a total of $555 million to expand the capacity of its subsidiaries in the developing markets of Uganda, Ghana, Zambia and Tanzania in Africa, and Peru in Latin America. SABMiller will invest $260 million in the four African countries.

SABMiller Africa’s impressive growth trajectory continued in the first half of the year to 30 September 2011, with volumes up 15%.  SABMiller Africa has seen growth of 34% in Castle premium beers (Castle Lager, Castle Lite and Castle Milk Stout). At the other end of the price spectrum, the company has introduced and expanded the reach of a range of affordable traditional and locally-sourced beers including Eagle sorghum beer, Chibuku opaque beer and Impala cassava beer.

This combination of strong underlying economic fundamentals and a full range of products at all price points has driven increased consumer demand for beer, particularly in Uganda, Zambia, Ghana and Tanzania. The newly announced $260 million investment programme is in addition to the $1.5 billion already invested in Africa in the past five years.

SABMiller plans a $295 million capital investment programme at its Peruvian subsidiary, Backus. Released over a three year period, the funds will be used to increase capacity in the business’ breweries in Ucayali, Cusco, Lambayeque, Lima and Arequipa.

Peru remains an attractive market with strong underlying economic indicators. In addition to positive GDP growth forecasts for the next ten years, the population is predicted to grow by 53% between 2000 and 2100. Beer consumption in Peru is currently more than 11m hectolitres per annum, and could rise to as much as 16m hectolitres by 2020. Per capita consumption stood at 38.2 litres per annum in 2010, which is significantly below consumption rates in Brazil (65.4 litres), Venezuela (77.8 litres) and the USA (79.8 litres).

SABMiller has invested approximately $570 million in Backus in the past five years, supporting its continued growth and development. Today, Backus is the second largest contributor to the Latin American division of SABMiller, which provides approximately a third of the group’s EBITA. Backus’ strong performance has continued in the first half of the current year, with beer volumes in the six months to 30 September 2011 up 11% on the prior period.