AB InBev Plans Additional Breweries in Mozambique, Nigeria

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Bottles of Beck's lager beer move along the production line at the Beck's brewery, operated by Anheuser-Busch InBev NV, in Bremen, Germany, on Wednesday, Nov. 4, 2015. U.K. regulators gave AB InBev yet another week to make a formal takeover offer for SABMiller Plc as the two brewers inch closer to securing the industry's biggest-ever deal. Photographer: Jasper Juinen/Bloomberg

Brewer will this year open an additional plant in Nigeria
Stella Artois, Corona helping to drive growth in S. Africa

Anheuser-Busch InBev NV is ramping up investment in Africa after seeing a boom in demand for its beer on the continent, building on the Budweiser owner’s $106 billion takeover of SABMiller in 2016.

Shipments in the region excluding South Africa increased by as much as 20 percent in 2017, putting it among the fastest-growing territories for the world’s biggest brewer. Premium brands like Stella Artois and Corona are growing in popularity in South Africa, according to regional Chief Executive Officer Ricardo Tadeu.

In April 2017, the Dutch group opened a $160 million brewery called Brassivoire with a brewing capacity of 1.6 million hectoliters a year on the outskirts of Ivory Coast’s capital Abidjan, directly challenging French Groupe Castel, which operates the only brewery in the fast growing West African country. (inside.beer, 28.11.2016)

Heineken also added 300 sales staff in South Africa, where AB InBev is clear market leader after acquiring SAB in in October 2016, and it acquired Stellenbrau, a craft brewer located in Stellenbosch near Cape Town/South Africa in April 2017. (inside.beer, 10.4.2017)

In addition Heineken has breweries in Nigeria, where it faces strong headwinds from AB InBev and Diageo (inside.beer, 15.5.2017), and the Democratic Republic of Congo.

“I am convinced our presence will contribute to the economic and social development that is already under way in Mozambique,” Boudewijn Haarsma, managing director of Heineken East & West Africa said. The country has a population of 29.5 million and its economy is set to grow 4.7% this year, according to the International Monetary Fund.

The Mozambique investment will look to fend off competition from rival Heineken, which is the middle of building a $100 million brewery in the southern African country.

It will also help AB InBev keep pace with demand in a market that saw growth over more than 20 percent in the first half of
this year, Ricardo Tadeu, the company’s Africa zone president told journalists in Johannesburg.

“It’s a reflection of how much we have been adding on the continent, constantly aiming for growth and putting the money
where our mouth is,” he said.

Tadeu said the company was not ready to disclose the size of its investment in the new facility, but added that the land
acquired for the project would allow for further expansion of brewing capacity in the future.

AB InBev already brews the 2M and Laurentina brands in Mozambique in another brewery.

Substantial gas reserves discovered off Mozambique’s Indian Ocean coastline more than a decade ago were expected to jumpstart its economy. But progress in setting up the infrastructure to tap them has been glacial, slowing the pace of investment in many sectors.

AB InBev paid roughly $100 billion to buy rival SABMiller in 2016, giving it a substantial presence on the continent of more than a billion people.

It has operations in 15 markets mainly in southern and east Africa, but also Ghana and Nigeria in west Africa.

It announced plans in March to invest $100 million in a new 1 million hectolitre per year brewery in Tanzania, where beer volumes jumped by a fifth last year and its local unit Tanzania Breweries already runs four facilities.

“We’re very excited about Africa because we have experience in Latin America and Asia. Some people look at Africa and see a
lot of volatility, uncertainty. We see opportunity,” said AB InBev CEO Carlos Brito, who was visiting South Africa.

“For us, Africa is definitely the place to be.”

(editing by Tiisetso Motsoeneng and David Evans)

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