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UGANDA BREWERIES LTD

HOME IS WHERE THE HOPE IS

UGANDA BREWERIES LTD

WE TAKE A LOOK AT WHAT UGANDA BREWERIES AND HOW THEIR SUPPLY CHAIN STRATEGY MAY SPELL HOPE FOR UGANDA.

HOME IS WHERE THE HOPE IS

Uganda Breweries Ltd continues to be Uganda’s leading branded alcohol beverages manufacturer, offering an outstanding collection of brands including beer, spirits and adult nonalcoholic drinks, setting the business up Uganda’s leading total adult beverage company. Their portfolio includes a wide range of beer, spirit, ready to drink (RTD) and non-alcoholic brands, and the company prides itself in knowing that no one else in the market has a portfolio to complete.

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he brewery is a subsidiary of East African Breweries Limited, itself a subsidiary of Diageo PLC, the world leader in manufacturing adult beverages. This gives Uganda Breweries access to a portfolio of brands that means it can satisfy every consumer’s need, from non-alcoholic carbonated beverages to an assortment

PROJECT MANAGED BY: MALVERN KANDEMWA

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Milly Glass Works Ltd.

Quality & Freshness Uncompromising Milly Glass Works is a prominent packaging manufacturer in the East Africa horizon. Formerly known as Bawazir Glass Limited, Milly Glass is a leading glass container and tableware manufacture in East Africa, based in Mombasa, Kenya. incorporated on 1st February, 2000 it has a long tradition in Glass Container Industry dating back to 1954. We have positioned ourselves in manufacturing of packaging for Beverage and Spirit sector in line with global environmental initiatives. We are passionate about our love for glass and an endeavour to build brands through ionic packaging. Our facilities have the latest machines and equipment sourced from European suppliers. Fuel efficient furnace, advanced forming machines with auto inspection, single liners, palletizers and printing we provide a complete environment friendly sustainable packaging solution. CAPACITY - 400,000 bottles a day; 3 automatic glass forming machines. Online inspection and physical and chemical laboratory for online testing. CUSTOMERS - We are servicing the top spirit packers and distillers in Kenya, Uganda and Tanzania. We are qualified and our facilities approved by major multinationals in Food/Beverage industry to manufacture their packaging. We produce Jars/Beverage/Spirit/ Water bottles. SERVICE - We have our own logistic fleet which ensures secured and fastest delivery to our customers. DESIGN - We have an in-house design team to ensure the client has a choice and can incorporate his desire in his packaging. We also have 3D printing which enables the client to visualize his product. T: +254 41 222 4401/2/4 | +254 41 222 2449 E: gm@millyglass.com | sales2@millyglass.com

www.millyglass.com

The number one choice for your transporting needs The company offers a wide range of transport and logistics services to meet the dynamic needs of the clients. Expediters can quickly move any parcel, pallets or any truck globally. Our professional drivers and staff are a constant reminder to our commitment on providing excellent and dependable services to truckload shipment. The company boast of its strong understanding of the fact that the customers’ needs are ever-changing and with the introduction of online stores, consumers want their cargo delivered at a specific time, to a specific place and have a 360 cargo visibility while on transit. That is why at expediters we operate on a customer centric philosophy and Kaizen principle of management. • Road Transport • Air Freight • Sea Freight • Relocation Logistics •

EXPEDITERS INTERNATIONAL LTD. P.O. Box 58394-00200 Nairobi, Kenya Tel: +254 722 206 353 / +254 733 699 001 / +254 774 450 105 Email: info@expediters.co.ke

GRAINPULSE LTD. Grainpulse offers agronomy and extension services to small-scale farmers as well as collection, processing, storage and trading of coffee and grains to various markets. In addition, Grainpulse has set up Uganda’s first crop-specific fertilizer blending factory that produce quality fertilizer blends that is affordable. The balanced crop nutrition to Ugandan farmers is delivering higher yields and better-quality harvest.

UNINTERRUPTED BREWING ANCHORED ON SUSTAINABLE LOCAL RAW MATERIAL SOURCING PARTNERSHIP WITH GRAINPULSE LIMITED

Grainpulse Limited is one of the leading Agro-business firms providing access to market for smallholder enterprise farmers in Uganda through our integrated business operations driven by focus on quality of agro inputs, Farming Community Presence, Extension of information & technologies for improved yields. The value of our partnership with Uganda Breweries significantly reinforces our commitment to the farmers by providing the market and strategic support for oursourcing initiatives that boost our local production, handling of grains and agro-processing. In doing so we drive supply of high-quality raw material to Uganda Breweries and facilitate the delivery of great brew to East Africa. Head Office: Plot 6/8 Nyondo Cl, Bugolobi Industrial Area, Kampala, Uganda Factories: Lwanyonyi, Mukono, Uganda

Tel: +256 (0) 392 174 758 I Fax: +256 (0) 414 252 542 Email: info@grainpulse.co.ug

www.grainpulse.co.ug

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OUR PARTNERSHIP WITH UBL The partnership between UBL and Grainpulse involves consignment stocking for all the local raw materials required for brewing by UBL, as well as an Agro Inputs Inventory Management for farmer supply. Thus, Grainpulse is part of an agribusiness value chain from farm to industries or table. Local raw material is the benefits to UBL while Grainpulse and the small-scale farmers are offered a formal market for onward sustainable supply that offer an opportunity to increase food security and poverty eradication. The key driver for our partnership is the expansion of our operation in the grain handling and trading plant. The factory offers a mitigation mechanism to reduce post-harvest loss occasioned to Ugandan farmers and leads to improved quality assurance of local produce. Our state-of-the-art facility includes 9 silos with a storage capacity of 20.000 metric tons and a processing capacity of 90 tons per hour. We are a reliable supplier of Ugandan agro products and associated in Inventory Management to UBL and offer solutions to our customers as a value add to their business.

of spirits and beers. It’s a portfolio that includes premium, mainstream, and value beers, and the same applies to spirits. All in all, it is a unique offering with a strong value proposition to consumers. These products are manufactured at Uganda Breweries’ state-of-the-art plant, which has a total brewing capacity of over a million hectolitres per year. That figure, already impressive, is set to grow by 50 per cent thanks to on-going investment in the expansion of the brewhouse. While they offer a whole menu of drinks, the brewery’s flagship brand in their signature Bell Lager that has been on the market for over 60 years. It’s the top name on a bill that includes such key UBL brands as Uganda Waragi, Tusker Malt, Pilsner,

“WE REMAIN CAUTIOUSLY OPTIMISTIC ABOUT OUR SECOND HALF OF THE YEAR, ALTHOUGH UNPREDICTED TAX AND REGULATORY CHANGES AND CHALLENGES IN OUR OPERATING ENVIRONMENT CONTINUE TO PRESENT POTENTIAL RISKS IN THE HORIZON.” White Cap, White Cap Light, Senator, Guinness, Allsopps and President Lager. These brands are brought to the consumer thanks to Uganda Breweries’ rich talent pool that includes some of the besttrained people. The beverage company directly employs over 390 people, but that is only the tip of the iceberg. The firm indirectly creates employment for thousands of more thanks to the company’s vast supply and distribution chain.

RISING FORTUNES

www.grainpulse.co.ug

Since we spoke to them last year Uganda Breweries has

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UBL Team at Grainpulse

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continued to prosper, with its parent company East Africa Breweries posting a 9% jump in pre-tax profit to Ksh. 10.6 billion for its first half to the end of December at the beginning of this year. The drinks company has attributed this impressive growth to the 10% increase in net sales to Ksh. 45.9billion. The EABL Group Chairman, Martin Oduor Otieno, said of the figures, “We are pleased by this performance. Although excise duty escalation on alcoholic beverages in Kenya’s last budget impacted bottled beer, a more stable operating environment provided an

opportunity to continue our growth momentum.” The growing sales figures may be due to EABL’s innovation initiatives, with Uganda Breweries joining EABL in bringing a number of new brands to market which has contributed 28% to the net sales of the Group. Among these newly launched brands are brands such as Hop House 13 Lager, Guinness Smooth, Sikera Cider, Black & White whisky and Triple Ace vodka, which have all contributed significantly to sales growth. Uganda Breweries’ contribution to this Group effort has taken the form of an agenda to shift into the premium beverages market, which has delivered a good mix and margins to EABL’s overall performance. “Marketing campaigns in Uganda Breweries such as Bell All-Star Tour & Tusker Lite Neon Experience helped drive bottled beer growth by 15%,” explained Andrew Cowan, EABL’s Managing Director and Chief Executive Officer. “We remain

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cautiously optimistic about our second half of the year, although unpredicted tax and regulatory changes and challenges in our operating environment continue to present potential risks in the horizon.” Cowan went on to add, “As EABL Group, we leveraged increased investment and operational efficiencies across markets and segments to expand, despite increases in alcoholic beverage taxes.”

“IT SHOULD BE A NATIONAL SHAME IF NEXT YEAR AND THE YEARS AFTER, UGANDA IS STILL IMPORTING FOOD PRODUCTS.”

HOPE IN LOCAL SOURCING

Of course, when Cowan predicted that sunny outlook, he has no idea that we were about to be hit by a global pandemic that was going to take a heavy toll on every sector. Recovering from that crisis is going to be no small task, but Uganda Breweries’ Managing Director, Alvin Mbugua, believes the key to recovery may lie in one of the breweries’ already existing strategies. When we spoke with Uganda Breweries last year, they told us about their new strategy to shift their supply chain towards locally sourced raw materials. “Our local raw materials sourcing agenda is to now source through one strategic

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partner. We don’t just leave the relationship to the outsourced partner,” said their head of procurement, Richard Atugonza. “We have our own teams of agronomists, educating farmers in best practices.” It’s a strategy that’s been paying off, as Mbugua said earlier this, year, “At Ugandan Breweries, more than 85 per cent of the raw materials used - the sorghum, corn starch (maize), cassava, barley and denatured spirit from sugarcane, are all sourced from Ugandan farmers under our Local Raw Materials (LRM) programme.” Today Uganda Breweries invests a total of Shs16 billion in agricultural inputs. The beverage company trains farmers and spends Shs74 billion a year on purchasing from local suppliers. Those suppliers are a group made up of 17,000 farmers. Over the next five years, Uganda Breweries intends to increase that investment to Shs 130 billion and touch over 50,000 farming households. Mbuga believes this strategy offers a bath not just for Uganda Breweries, but for Uganda’s economy as a whole. “Let’s apply import substitution to the agriculture sector which accounts for 45% of exports, employs 64% of all Ugandans and 72% of all youth,” he has said. “It should be a national shame if next year and the years after, Uganda is still importing food products - animal and animal products; vegetable products, animal, beverages, fats and oil; prepared foodstuff, beverages and tobacco worth $713 million (Shs2.7 trillion) like we did in 2019.” Uganda Breweries vision, for a Uganda with a self-sufficient food supply chain, offers hope for the company, and the country’s future.

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