AB InBev to invest US$400m in Nigerian unit expansion programme

NIGERIA – World’s largest beer maker, Anheuser-Busch InBev (AB InBev) has said it expects its total investment in the newly built Sagamu Brewery in Nigeria to hit US$400 million.

Speaking during a media briefing in South Africa, the company’s chief executive officer, Carlos Brito, said that the investment is expected to improve the firm’s performance in the Nigerian market.

He said that the US$250 million brewery has already started operation and capacity will be expanded in phases, but however did not provide a timeline for the next phase.

“Nigeria is becoming a more and more important market as we grow in that market.

“I mean we’re growing double digits, we didn’t grow in the past as fast because we were lacking capacity and now that we have capacity, strong brands and a great group of people we’re challenging the status quo there.”

The Belgium based firm is the parent company of International Breweries Plc which has four breweries in Nigeria.

Supported by the acquisition of world’s largest brewer, SABMiller in 2016, Carlos said that AB InBev sees further African investment especially across the South African and Nigerian market.

Demand in Africa was cited by AB InBev as a major factor in the decision to buy Johannesburg-based SAB, a combination that brought together brands such as Budweiser and Stella Artois with SAB’s best sellers such as Castle lager, reports Bloomberg.

The multi-million dollar investment by AB InBev seeks to consolidate its position ahead of its rivals, including Heineken NV, in the continent amid the rising household incomes and beer consumption across a population of about 1 billion people.

However, AB InBev has suffered over recent quarters in South Africa due to a combination of supply issues and a depressed consumer economy.

Carlos noted that the firm’s strategy is to grow its product portfolio across the spectrum of income and taste levels or introduce more affordable option in the near future.

In the Nigerian market, performance in the beverage industry has mirrored occurrences in the macroeconomic space especially following the recession that hit the country in 2016.

This had a debilitating hit on the brewery industry as the ensuing liquidity crunch led to a sharp decline in the disposable income of consumers subsequently leading to depressed consumer spending.

Following the exit of the country’s economy from recession in the second quarter of 2017, brewers intensified their scramble for consumers’ loyalty and increased market visibility via strong marketing campaigns and expanded distribution outlets.

News Reporter

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