Southern Sudan new battlefield for brewers

SABMiller, the world’s second largest brewer, and East African Breweries Limited (EABL) have both announced plans to boost their presence in Southern Sudan.

SABMiller's White Bull brand

SABMiller's White Bull brand

SABMiller subsidiary company, Southern Sudan Beverages Ltd (SSBL), last month announced that it is doubling the size of its existing brewery operations in Juba and has introduced a soft drinks range and bottled water product into the country.

At the end of August EABL also said that it intends to establish a brewery in Juba. EABL plans to build a 700,000 hectolitre (hl) plant, which can be expanded to 1 million hl.

Majority held by the world’s biggest drinks group, Diageo, EABL currently only exports its products to Southern Sudan.

EABL Group chief executive officer, Seni Adetu, told investors that the new plan is in line with the company’s strategy of reducing the challenges the brewer has been facing in the Great Lakes region.

“Specifically in Southern Sudan, the government introduced a higher excise duty for imported alcoholic beverages at 35% as opposed to locally produced beverages which attract a duty of 25%,” said Adetu.

EABL’s products are therefore priced unnecessarily higher than the locally produced drinks, he said.

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SABMiller explained in a press release that by the end of 2010, brewery operations in Southern Sudan will have increased to 350,000 hl from its initial 180,000 hl capacity at opening in May 2009. The original US$37m investment created employment for hundreds of Sudanese and created a pioneering land lease agreement between SABMiller plc and the local Juba community that ensured they receive royalties from the development.

The brewery will continue producing White Bull lager and Chairman’s Extra Strong Beer in addition to beginning production of two of SABMiller’s existing brands Nile Special Lager and Club Pilsner. Carbonated soft drink (CSD) capacity will also be increased from 60,000 hl to 320,000 hl in response to the initial popularity of SSBL’s Club Minerals Sparkling Soft Drinks range and Source Pure Drinking Water.

Ian Alsworth-Elvey, managing director of SSBL said: “Many people questioned our logic in building not only the first brewery that Southern Sudan had seen for 50 years but also the first manufacturing facility in Juba. However, the business has had a very warm welcome to the country and our beer, soft drinks and water brands have found real traction with consumers. These products are comparable to any in the world and offer a local, high quality product at an affordable price.

“We have sold more beer in the first three months of our second year of operation than we did in the first nine months since production began and in 18 months we have turned the brand into one of the most recognisable in the country.”

Next year Southern Sudan will hold a referendum to determine whether to remain part of a united Sudan or become a separate state. The referendum was a core component of the 2005 Comprehensive Peace Agreement (CPA) that ended decades of conflict between the Southern Sudan People’s Liberation Movement (SPLM) and the Khartoum government.

Additional reporting by our east African correspondent, Dinfin Mulupi