Beer maker, Namibia Breweries Limited (NBL), is considering setting up a plant outside Namibia and South Africa from where it can export its products to its growing African markets.
Namibia Breweries said it is likely to partner with Heineken in the proposed venture without giving further details on where this plant or facility would be located.
The Dutch brewing company, Heineken, has plants in Nigeria, and is planning one each in Mozambique, Ethiopia and Egypt.
NBL has for the last five years been growing its market share in Zambia, Botswana, Kenya, Tanzania and Zimbabwe among other African markets.
“It can be one of many things. We are exporting all our brands out of Namibia. That brings a challenge on price,” Managing Director, Wessie van der Westhuizen, said in an interview.
“We feel confident that is an opportunity that we need to explore further. We are approaching it with all the aggression.”
Finance Director, Graeme Mouton, said a joint venture with Heineken would be the preferred option.
“The easiest route will be to partner with them and tap into the footprint that they have in Africa.
“We are not talking about new markets, we are talking about a plant that will supply existing markets,” Mouton said.
NBL and Heineken have already combined forces and jointly export their products in Africa.
Van Der Westhuizen explained that NBL and Heineken have combined specific exports markets in Africa, under one umbrella. “We have combined entities in these markets taking care of total portfolio of NBL and Heineken. The export business report to Heineken South Africa but we co-design strategies.”
Van Der Westhuizen said the focus in the short-term will be to further grow volumes in South Africa through Heineken, while exploring longer-term opportunities to establish a footprint in other African markets.
In the financial year ended 30 June 2018, NBL’s operating profit, earnings per ordinary share and profit attributable to shareholders increased by 0.34 percent, 25 percent and 25 percent, respectively.
A final dividend of 46 cents was declared on 4 September 2018, which represents an increase of 9.5 percent from the previous period.
An additional special dividend of 193.6 cents per share was also approved.
Despite the total beer market contracting in 2018, NBL still enjoys the largest market share in Namibia.
Tafel Lager, the biggest beer brand in the country, exceeded volume targets following the introduction of Tafel Lite and new pack sizes in South Africa.
Mouton said while Namibian beer volumes slightly decreased by two percent, NBL’s overall volume declined by 5.5 percent.
Revenue decreased to N$2.6 billion compared to N$2.7 billion in 2017.
Profit attributable to shareholders of N$398 million was delivered, an increase of 25 percent on prior year. This increase was mainly attributable to the significant decrease in equity accounted losses from NBL’s associate, Heineken South Africa and a decrease in operating expenses.
The company’s brand portfolio includes leading brands such as Windhoek Lager, Windhoek Draught, Windhoek Light, Tafel Lager, Tafel Lite, King Lager, Vigo, Code, McKane and Aquasplash.
In terms of market share volumes, 68.74 percent of NBL products are consumed in Namibia, 26.06 percent in South Africa, 5.15 percent in other African countries, 0.01 percent in United Arab Emirates and 0.02 percent in Australia.