SABMiller opens its second brewery in Uganda
Posted: 22 August 2013 | SABMiller | No comments yet
SABMiller’s Ugandan subsidiary, Nile Breweries Ltd, marks the official opening of its new brewery in Mbarara…
SABMiller’s Ugandan subsidiary, Nile Breweries Limited (NBL), today marks the official opening of its new brewery in Mbarara, western Uganda. Following an investment of US$90m, construction began on the new site in February, 2012, and the brewery has been operational since April this year. The new facility in Mbarara is NBL’s second brewery in Uganda and doubles the company’s potential brewing capacity to 3.6m hectolitres.
Until now, NBL has operated a single brewery on the River Nile in Jinja. The brewery was originally completed in 1956, and underwent a major $29 million expansion in 2009, doubling the capacity of the brewery to 1.8 million hectolitres. Only four years after this expansion, the Jinja site is already approaching maximum production, which pointed to the need for more capacity to be added in order to ensure an uninterrupted supply of NBL’s brands to the market.
Commenting on the new brewery’s opening, Mark Bowman, MD SABMiller Africa, said:
“The growth potential in Uganda, particularly Western Uganda, is significant and the new brewery in Mbarara will allow us to realise the opportunity. Building a second brewery in Uganda is part of our strategy to invest in new capacity across Africa so that we are in a strong position to capitalise on the continent’s long-term beer market growth over the coming decades.”
Clear beer volumes in Uganda have been growing at a compound annual growth rate of 11% for the past six years. Growth is expected to continue at this level for the foreseeable future, driven by GDP growth, a rapidly growing population, and currently low per capita consumption. Western Uganda is the fastest growing regional beer market within Uganda making Mbarara the ideal location for a new brewery. The town is a major transport hub for the region, and it also benefits from superior infrastructure, including a ready water supply from the River Rwizi, and a reliable source of power.
Capacity of the new brewery will start at 650,000 hectolitres, expandable to 1.8 million hectolitres on the same site. Brands that will be produced at the new brewery include NBL’s flagship Nile Special, Club Pilsener, Eagle Extra (Uganda’s biggest beer brand), Eagle Lager, and Chairman’s Extra Strong Brew.
This new brewery, the expansion of the Jinja brewery in 2009, and investments in malting and effluent treatment plants in 2011, bring SABMiller’s total capital investment in Uganda to over US$200 million in the last five years. The brewery will provide direct employment for approximately 180 people, and a further 32,000 indirect jobs will be supported in the economy through farming, consumer outlets and distribution.
Western Uganda is a stronghold for NBL’s rapidly growing sorghum-based Eagle beer brands. Supplying raw materials to the brewery represents an opportunity for the farmers in the Ankole and Kigezi regions to join the ranks of the estimated 20,000-plus farmers who are already growing sorghum, barley, maize and sugar for Nile Breweries. The business currently procures about 20,000 tons per annum – over 60% of its brewing requirements – locally, and plans to increase this figure up to 40,000 tons or over 90% of brewing requirements by 2017.