Water challenges give NBL headache

Namibia Breweries Limited (NBL) says water is expected to remain the biggest challenge facing its operations, and would affect the brewer’s strategic choices and investments over the next financial year.
NBL said this last week during the announcement of the Namibia Stock Exchange listed entity’s financial results for the year ended 30 June 2016.
The announcement by the brewer is in sharp contrast to comments made by Managing Director, Wessie van der Westhuizen earlier in the year, when he told the Windhoek Observer that the 20 percent water usage reduction enforced by NamWater in March this year would not impact the company’s operations and productivity, as they were implementing numerous contingency measures to mitigate the water risk.
The water reduction came into effect on 1 March, because of deteriorating inflows into the Omakato, Swakoppoort and Von Bach dams, which supply the capital.
Van Der Westhuizen said then that NBL had invested heavily over the years in improving efficiencies in all areas inclusive of water utilisation.
“The measures include water savings activities through investments of N$2, 6 million, which will reduce the water consumption by up to 20 percent.
“An additional measurement is water supply from own boreholes, which also requires an additional water pre-treatment plant. NBL does not foresee any operational issues currently, as we use 3.5 units of water to produce one unit of beer, which is among the best 10 percent efficient breweries in the world,” Van Der Westhuizen said at the time.
However, when announcing the company’s results last week, Van Der Westhuizen lamented the current water situation in Namibia and said the company continue to execute its water mitigation plan in order to reduce dependency on public water resources, thereby contributing to the sustainability of the local economy. 
He said the brewer was continuously engaging with strategic partners such as government and the City of Windhoek to find and support solutions, and had indicated its willingness to co-invest.
NBL recorded a 0,3 percent drop in revenue to N$2.4 billion, compared to the same period last year, while operating profit was up by 6, 7 percent to N$541 million and profit after tax was up by 43.8 percent.
NBL said Namibian beer volumes, driven predominantly by Tafel Lager sales, continue to grow, increasing by 8 percent in the period under review compared to the previous period.
The increase in beer volumes was also attributed to the launch of two new beer brands, Amstel Lite and King Larger, which is the first commercial beer brewed from local barley.
“We further launched two new soft drink variants, as an addition to our non-alcoholic portfolio, being McKane Lemonade and Vigo Marula Lite. NBL has also strengthened its strategy to position itself in the craft beer market and started trading in the mainstream water category with the brand Aquasplash.
“As a responsible Namibian corporate citizen, NBL remains committed to government‘s Growth at Home strategy, the Harambee Prosperity Plan and ultimately Vision 2030. NBL will continue to re-invest into the growth and development of our human capital and thereby further building Namibian skills capacity,” Van Der Westhuizen said.