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NBL’s beer production in SA reaches peak
Featured

24 March 2017
Author   Eric Nyasha Mhunduru

Namibia Stock Exchange listed brewer, Namibia Breweries Limited’s (NBL), beer production volumes in South Africa, have surpassed the 450,000 hectolitre mark, Managing Director, Wessie van der Westhuizen, said last week.

NBL’s beer production in Africa’s second biggest economy has been on an increase since the first quarter of 2014, in response to the water shortages that have plagued the country in recent years and following the brewer’s acquisition of a 25 percent stake in Sedibeng Brewery in 2015.

Van der Westhuizen told the Windhoek Observer last week, when he announced the company’s financial results for the six months ended 31 December 2016, that the water crisis in the central region was no longer a challenge to the company’s operations.

He said the brewer had managed to drill five boreholes to augment water supply, and that the boreholes were now contributing 30 percent of the company’s total water supply.

Van der Westhuizen also said that the brewer had breached the stipulated 450,000 hectolitres of production to be migrated to South Africa.

“We migrate according to the contract and it currently stipulates that year on year there is a certain volume that will be migrated to SA until we reach the point where we have 450, 000hl of the total volumes sold in that country and 450,000hl will remain here and that is where migration stops,” van der Westhuizen said.

“So we are at that point now where we are only producing the 450,000hl for all our brands being sold in SA, but with the growing market share and with the success that company is receiving in that country we are getting requests to produce more than the 450,000hl, because of some constrains that they are faced with in their production lines. So even though the contract says 450, 000 hl we are currently producing more than that.”

NBL’s beer brands are brewed and packaged under license by Heineken South Africa at the Sedibeng Brewery. The NBL MD further said that the company had managed to reduce its dependency from the City of Windhoek (CoW) by 30 percent as at 16 December 2016, up from 7, 3 percent in June 2016.

“This means that 30 percent of the water we use, we are taking out of our boreholes and not the CoW and they have that water available to the public.

“This is a tremendous achievement and something we are proud of to assist in this water crisis. We did receive some good rains, but we need to continue to lead the water saving agenda and make sure that we have a sustainable solution and not find ourselves in the same situation in two to three years from now,” he said.

The period under review saw the launch of the low-calorie Tafel Lite beer as a range extension to NBL’s biggest beer brand, Tafel Lager.

Van der Westhuizen said the new brand, which was launched on 10 July 2016, has been well received by the market.

“Tafel Lite was launched very successfully and if you look at the performance of this brand and a similar brand that was launched over a similar period, it has exceeded by double digit numbers.

“So we are very excited about that brand and it only means good things going forward. We are definitely giving our competitors their run for their money with these various brands we are implementing.”

Van der Westhuizen was, however, cagey when asked about King Lager’s contributions to income. The King Lager was launched on 19 October 2015.

“Our King Lager has a very patriotic role to play. So it is very important from a volume point of view, but more importantly it is essential to absorb the un-malted barley that is currently being produced to fulfil our agreement between us, AgriBusDev and the Government represented by the Ministry of Water, Forestry and Agriculture, so that is the very reason King lager is there.

“We are obviously looking at executing various marketing strategies behind the King Lager brand, but the number one principle of King Lager is to ensure that we need to grow the local barley business.”

Commenting on the overall performance of the brewer, van der Westhuizen highlighted that under the circumstances, NBL’s results exceeded expectations and would continue to grow revenue and profit as well as maintaining market share.

NBL reported a 13,6 percent increase in revenue to N$1,5 billion, while its operating profit recorded a 6.5 percent increase to N$326 million, and its profit after tax surged 45 percent to N$96 million during the period under review.

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