AB InBev will invest $100m in new brewery in Tanzania

File Image: IOL

File Image: IOL

Published Mar 22, 2018

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JOHANNESBURG - Global brewer Anheuser-Busch InBev (AB InBev) will invest $100million (R1.2billion) in a new beer plant in the Tanzanian city of Dodoma, the government of Tanzania said on Tuesday.

Tanzanian President John Magufuli chaired a day-long meeting on Monday with major foreign and local investors and gave government ministers a seven-day ultimatum to resolve investor concerns. “I want to assure you that my government does not hate business people - we like them and we will support them this is the right time to do business (in Tanzania), but you must pay your taxes,” the president’s office quoted Magufuli as telling investors.

Meanwhile, AB InBev’s 2017 non-recurring restructuring charges in relation to the merger with SABMiller was $468m, according to the company.

AB InBev and SABMiller’s multimillion-dollar merger was completed in 2016. The non-recurring restructuring charges for the 2016 financial year was $323m. “These charges primarily relate to organisational alignments in Europe, Middle East, Africa (Emea) and Asia Pacific,” AB InBev said in its 2017 annual report.

It said the $468m was for the SABMiller integration. “These changes aim to eliminate overlapping organisations or duplicated processes, taking into account the right match of employee profiles with the new organisational requirements.

"These one-time expenses, as a result of the series of decisions, provide the company with a lower cost base in addition to a stronger focus on AB InBev’s core activities, quicker decision-making and improvements to efficiency, service and quality."

AB InBev, which has more than 500 brands which include Budweiser, Corona, Stella Artois, Castle, Castle Lite, Hoegaarden and Leffe, has described 2017 as a transformative year following the multibillion-dollar merger between AB InBev and fellow brewer SABMiller.

In their joint comments in the company’s annual report, chief executive Carlos Brito and chairperson Olivier Goudet said: “We are well on our way to achieving our most successful business integration ever and we delivered the best performance in three years. Our reshaped brand portfolio is rising to every occasion to capture future growth.

“The combination with SAB has exceeded our expectations. Cost synergies are not only greater than originally expected, but they are also being delivered at a faster pace. Revenue synergies, although not externally quantified, are well under way through the successful launch of our global brands into new territories, among other activities.”

AB InBev distributes beer to more than 100 countries.

Brito and Goudet said the the company’s commercial priorities included the expansion of its global brands. “We continue to leverage the potential of our global brands by expanding into new markets such as South Africa, Colombia and Australia,” they said.

In 2017, AB InBev increased revenue in the Emea region - which includes South Africa - by 6.3percent. “Drivers included growth of premium and global brands in Western Europe, which enabled us to gain market share in a majority of countries, as well as beer volume growth in Africa, and our global brands are now in South Africa,” the company said.

- BUSINESS REPORT 

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