Africa Sales proceeds in Africa fell to EUR 311
million due to declining sales and lower exchange
rates. Profitability was also sharply lower. Exports
to Africa however, increased.
In Africa, a divide is becoming visible. On the
one hand, economic development in a number
of countries is positive; on the other, there are
countries where as a result of internal and external
conflicts, the economy and purchasing power are
showing a decline. The latter resulted in lower sales
by our breweries, especially in the Democratic
Republic of Congo, Congo, Burundi, Rwanda,
Sierra Leone and Angola.
A special word of thanks goes to our employees
in Africa, who with great motivation and
commitment have enabled our companies to
operate and, in view of the often difficult
circumstances, have achieved satisfactory results.
Sales in the Democratic Republic of Congo were
under pressure. The position of the local currency
also weakened further. This led to a drop in profita
bility. We increased our interest in Bralima last
year from 88% to 94%. The bottle factory
established in Kinshasa saw its sales shrink as a
result of a decline in the beverages market.
Although the trade embargo against Burundi
was lifted in early 1999, the effects can still be felt.
The brewery has increasing problems in
purchasing raw materials and packaging materials.
Sales were consequently under pressure.
Sales in Congo, were virtually at the same level
as the previous year in spite of the unrest in the
country.
In Rwanda sales showed a continuing decline,
due in part to an increase in the excise duty on beer.
In Reunion, a new soft drinks factory, which
has been built on the site of the brewery, has
been commissioned. Both turnover and results
remained at last year's level.
In Chad, Brasseries du Logone introduced a new
beer named Chari onto the market. Although this
product was well received by consumers, sales
were disappointing due to competition from
imported beers and the lack of transport facilities
during the rainy season. Heineken acquired the
remaining 50% of the shares in Brasseries du
Logone.
As a result of fierce competition Ghana
Breweries in Ghana was unable to maintain its
market share entirely. Sales were at the 1998 level.
The process of integrating the two breweries,
KBL and ABC, that merged in 1998 was continued
successfully and led to substantial savings. This
yielded better results.
The brewery in Sierra Leone was unable to
produce for the entire year as a consequence of
the political situation. Parts of the brewery were
damaged in the fighting.
The beer market in Nigeria once again showed
a substantial increase as a result of the abolition
of excise duty on beer during 1998. Nigerian
Breweries, in which we increased our interest
to 40%, achieved a considerable rise in sales.
Its market share also improved. A comprehensive
programme of investments has been set in motion.
Work is being done on a vitalization of the brewery's
range of beers.
In South Africa sales of Amstel beer brewed
under licence rose considerably thanks in part to
the introduction of a larger bottle. Sales of imported
Heineken beer also grew.
Efforts in the sphere of education and training
were continued and augmented. The number of
training programmes at our African branches, at
our own specialist training institutes in Kinshasa
(DRC) and Lagos (Nigeria), as well as in Europe was
expanded and the number of trainees increased.
Together with a number of international
organizations Heineken is involved in several
medical projects. These projects are in addition to
the medical care that we already provide in Central
Africa. This care covers all our employees and their
families, a total of about 62,000 people. Due to a
lack of sufficient public health care, the care we
provide constitutes an exceptionally important
element of our overall policy. In 1999, for example,
a new medical clinic was opened at the Kinshasa
brewery which provided high-quality medical care
to many tens of thousands of visitors. A similar
care policy will be developed in West Africa as well.
Sales proceeds in Africa fell to EUR 311 million as a result of lower
sales and a drop in exchange rates. Profitability was also sharply lower.
HEINEKEN N. V.
REVIEW OF THE
EXECUTIVE BOARD
19 9 9
31