‘AB InBev invested $200m in Africa since SABMiller deal’

May 23, 2019

Anheuser-Busch InBev NV has invested $200 million in its operations in Africa since the world’s largest brewer bought SABMiller in 2016, according to Chief Executive Officer Carlos Brito.

According to Bloomberg News, AB Inbev, based in Leuven in Belgium, has invested the bulk of that money in South Africa and Nigeria, Brito said in Johannesburg on Wednesday. That includes a new brewery near Lagos, the commercial capital of Africa’s most populous country.

The world’s largest brewers, including AB-InBev and rival Heineken NV, are investing in Africa to take advantage of rising beer consumption in the world’s least developed continent.

Demand in Africa was cited as a significant factor in the decision to buy Johannesburg-based SAB, since when, AB Inbev has since sought to expand the availability of signature brands such as Budweiser and Stella Artois, while retaining a commitment to SAB’s best sellers such as Castle lager.

In October 2016, the Belgium-based company acquired leading South African company, SABMiller and the move has seen it tighten its grip across Africa to 14 other countries. Currently, the company produces a third of the world’s beer with over 500 brands across 100 countries.

Since its grand entry into the continent with the acquisition of SABMiller, AB InBev has enjoyed a soothing cruise in the control of Africa’s beer market, recording a growth of more than 20 per cent this year. But the recent unprecedented move by its fierce competitor and the second-largest brewery company has kept the company on its toes, initiating new plans.

With earnings before interest, taxes, depreciation and amortization in South Africa leapfrogging to 21 percent in 2017, there are high expectations and optimism about the success of the company in Mozambique. In March, AB InBev revealed plans to invest $100 million in a new 1 million hectolitre per year brewery in Tanzania in addition to over $250 million in investments in Nigeria, reaffirming its position as a superpower in the evolving African beer industry.

The rise in beer consumption across Africa is one of the major factors responsible for the growth of beer makers in Africa. According to the statistics released by Global data, beer consumption in Africa is estimated to grow by five per cent annual growth rate (AGR) between 2015 and 2020. The figure is the highest growth rate across all continents in the world, taking Africa to a vantage point in beer consumption in the world.

 

- Bloomberg

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