Regional Review
Africa/Middle East
Middle East
Operations
Heineken has fully consolidated breweries
in Egypt and Lebanon, the only breweries
in those countries. Al Ahram Beverages
Company, which is market leader in Egypt,
also has an extremely successful product
in Fayrouz, a non-alcoholic malt drink.
The brewery started producing Heineken
beer in December 2003. As well as gener
ating major cost savings, local production
will also enhance the Heineken brand's
growth potential in Egypt.
After substantially increasing its interest
in the Almaza brewery in Lebanon in
2002, Heineken also acquired the distri
bution operation in 2003. In addition,
Almaza secured the worldwide rights to
Laziza, the Lebanese beer brand, which
has given it a strong position on the
home market. As a result of an exchange
of shares, Heineken's interest in Almaza
S.A.L. decreased from 81% to 67%.
Heineken has minority interests in
Tempo Beer Industries in Israel and Jordan
Brewery in Jordan, which brews Amstel
beer under licence. The most attractive
export markets in the region are the Gulf
states.
Performance review by country
In Egypt, although consumer purchasing
power was impaired by increased prices
caused by the steep decline in the value
of the Egyptian pound, the beer market
grew appreciably and Al Ahram Bev
erages Company's sales kept pace. Sales
of Fayrouz, a non-alcoholic malt drink
available in a range of fruit flavours, were
up by almost 50%, which translated into
dramatic growth in the brand's share
of the soft-drinks segment. Despite an
excellent performance by Al Ahram
Beverages Company, the result in euros
was down slightly, due to the decrease of
almost 40% in the value of the Egyptian
pound.
The beer market in Lebanon was static
and sales of Heineken and Amstel were
satisfactory.
The unstable situation and low tourist
numbers in Israel kept the beer market
weak and Tempo Beer Industries returned
a lower result. Further cost savings were
made.
In Jordan, Jordan Brewery's sales and
result were slightly down on the year
before.
The beer market in the Gulf states,
the most attractive export markets in
the region, softened a little, mainly due to
the lack of tourists and the negative effect
on purchasing power of the strong euro
in making imports more expensive.
As a consequence, our sales were slightly
lower.
REPORT OF THE EXECUTIVE BOARD
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