By Tunde Osho
International Breweries Plc (“IBPLC”), the Nigerian unit of Belgian brewer, Anheuser-Busch InBev said, it was battle-ready to take on its competitors in the Nigerian market – Nigerian Breweries Plc and Guinness Nigeria Plc. IBPlc on Thursday finalized a three-way merger with its sister companies, Intafact Beverages Limited and Pabod Breweries Limited.
Speaking with the media recently, Annabelle Degroot, who is the Managing Director of IBPlc (the merged company), said that while the firm has just consolidated its holdings in the country, it was not new in the market.
“We have been competing in the market for eight years now and so we know our competitors and we know them well.”
The MD said that the company has been able to take away market share from its rivals, noting that it has very strong brands that have endeared with consumers. Although Hero Lager and Trophy Lager are not new in the market, they are performing well, she added.
Ms. Degroot said that with the increased capacity coming, the company would be able to get those brands to more consumers.
IBPlc announced in November that it was constructing a $250m brewery in Sagamu, Ogun State, which is expected to come online in the second-half of 2018.
She explained that the firm is currently constrained to serve only the regions where Hero Lager and Trophy Lager are produced. Hero Lager is produced in Onitsha, which is in the Eastern part of Nigeria, while Trophy Lager is produced in Ilesha, in Western Nigeria; but with expanded capacity, the company would be able to cover more territories.
Degroot said that the expanded company would offer more choices to beer drinkers, would make its products available to everybody and provide a wider portfolio of products. In the “core space”, the company will have Hero and Trophy Lagers which its consumers want to buy. And for more premium products, consumers would be able to buy Castle Lite, Budweiser and Eagle Lager, which is an affordable product.
Again, she stated that part of the benefits of the three-way merger is availability of more products and additional capacity.
The MD revealed that it will introduce AB InBev’s global brands in the market to have some fun and increase choice. AB InBev’s global brands include Budweiser, Corona and Stella Artois. However, she noted that the global brands complement the local brands which would always be the biggest brands in the market.
Degroot would not reveal the exact capacity of the brewery under construction due to competitive reasons, but did say that AB InBev was spending over $250 million. She noted that it is going to be bigger than any of the existing breweries owned by the brewer and would be its second largest on the African continent.
The MD said that the firm sources majority of its raw materials locally – things like packaging, bottles, maize and sorghum. The only item that is currently not sourced locally is malt and that is because it is not produced in the country. However, with the expanded capacity coming, it is likely to increase sourcing of things like sorghum and Cassava.
She noted that the growth the company is experiencing and the added capacity that is coming in 2018 will create more employment in both technical areas and sales.
Commenting on IBPLC’s half-year results which saw a 34% increase in cost of sales, she said that the company had recently come under new management with AB InBev, which has a stricter and more prudent ways of recognizing debts that could possibly go bad. So, it provides for it at an earlier stage than it has done in the past. She explained that there has been an alignment within the company’s financials to get it in line with AB InBev’s global policies.