Africa Insights M&A
INVESTMENT
Coke partners SABMiller to create African beverage bottling giant
Uganda opens ultramodern chicken farm and processing facility
AFRICA – Competition in the bottled water category is expected to lessen as South African brewing giant SABMiller has combined with The Coca-Cola Company to bottle and distribute its beverage brands in southern and eastern Africa, in a move expected to create the region’s biggest soft beverages bottler. The new bottler, Coca-Cola Beverages Africa, enables SABMiller and the Gutsche Family Investments (GFI, majority shareholders in Coca-Cola Sabco) to combine their bottling operations of their non-alcoholic ready-to-drink beverages businesses in Southern and East Africa. It will serve 12 high-growth countries accounting for about 40 per cent of all Coca-Cola beverage volumes in Africa. With more than 30 bottling plants and over 14,000 employees, Coca-Cola Beverages Africa will be the largest Coca-Cola bottler in Africa. On full completion of the proposed merger, Coca-Cola Beverages Africa will be majority owned by SABMiller (57.0%), with GFI taking 31.7% and The Coca-Cola Company having 11.3%. “A combined Coca-Cola bottling operation is further evidence of our commitment to Africa, and our firm belief in the tremendous growth prospects that the continent offers,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company. “Soft drinks are an important element of our growth strategy. This transaction increases our exposure to the total beverage market in Africa. The opportunity is significant, 8
dec 2014/Jan 2015 | Food Business Africa
with favourable demographics and economic development pointing to excellent growth prospects,” said Alan Clark, SABMiller Chief Executive. “This also signifies a strengthening of our strategic relationship with The Coca-Cola Company.” The merger brings SABMiller and Coca-Cola together after a number of years of direct competition with each other in the region. SABMiller has over the last few years acquired a number of leading water companies in the region, including leading player Keringet in Kenya and Ruwenzori in Uganda, which competed aggressively with Dasani, Coke’s flagship bottled water brand. The deal brings these competing brands under one roof, putting an end to this competition. Coca-Cola Beverages Africa will initially produce and distribute Coca-Cola beverages in nine countries: South Africa, Kenya, Ethiopia, Mozambique, Tanzania, Uganda, Namibia, Comoros and Mayotte, with Swaziland, Zambia and Botswana expected to be added at a later date after approvals from shareholders. As part of the deal, Coke will also acquire SABMiller’s Appletiser brands on a worldwide basis, and acquire or be licensed rights to a further 19 non-alcoholic ready-todrink brands in Africa and in Latin America, for an approximate cash consideration of US$260m. SABMiller will retain ownership of its non-alcoholic malt beverages. Phil Gutsche will be Chairman of Coca-Cola Beverages Africa which will be headquartered in Port Elizabeth, South Africa.
UGANDA - The meat industry has a received a major boost when a new ultra-modern broiler farm and chicken-processing facility was opened in the Central Uganda district of Luweero. Rafik Manji, the company’s Managing Director said Hudani Holdings is responding to the demand for chicken protein which is on the rise in Uganda especially among the growing middle-class, whose lifestyles are changing to appreciate white–meat based diets. Manji explained that the farm intends to focus on filling this supply gap with a fresh approach to poultry, through consistent production and assured product availability. The farm consists of a four metric tonne feed-mill, four 25,000 capacity broiler houses, two-newly commissioned environmentally controlled and automated broiler houses with a capacity of 40,000 birds each and a 15,000 square metre abattoir as part of an integrated agri-business venture. The farm’s processing facility is also the first highly mechanized abattoir in Uganda and the largest chicken processing facility in East Africa, according to the company. The farm’s abattoir processes about 2,500 birds per hour and 220,000 birds per week. The current capacity is 260,000 birds per eightweek cycle. Already the farm is supplying Kentucky Fried Chicken, a global fast food franchise which recently opened in Kampala as well as Fresh Cuts, a leading food processor in Uganda – The Independent
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