5.8
60
Nigeria
Other countries
Increasing volume and driving efficiencies
57 Heineken N.V. Annual Report 2004 Report of the Executive Board Regional Review Africa and the Middle East
HIGHER SALES AND IMPROVED OPERATING RESULT
BEER AND SOFT DRINK SALES VOLUME IN AFRICA AND THE MIDDLE EAST EXPANDED AGAIN IN 2004,
THANKS MAINLY TO WIDER DISTRIBUTION AND INCREASE OF PRODUCTION CAPACITY. TOTAL GROUP BEER
VOLUME GREW 6.1% TO 13.5 MILLION HECTOLITRES. SOFT DRINKS SALES ROSE 2.7% TO 2.6 MILLION
HECTOLITRES. AFTER FALLING IN 2003, OPERATING RESULTS IN LOCAL CURRENCIES BOUNCED BACK
STRONGLY, THANKS TO VOLUME GROWTH AND COST CONTROL.
Total beer sales
million hectolitres
Market share
percent
I Market position
position
In Nigeria, Africa's second largest
beer market and the most important
African market for Heineken,
our main operating company
- Nigerian Breweries - raised volume
output by i.2% to 5.8 million hectolitres
in a market that remained stable.
The stable beer market bore a strong relationship to the economy, which came to a standstill in the
second half of 2004. Inflation and national strikes also had a dampening effect on consumption.
Despite this, Nigerian Breweries was able to raise market share and prices.
Together with efficiencies offered by the new brewery at Ama, which entered service during the
year, we were able to achieve a substantial increase in operating result both in local currency terms
and in euro.
The new brewery, with a capacity of 3.4 million hectolitres, is achieving significantly lower energy
and water costs. The old brewery near Enugu was closed. The commissioning of the new brewery led
to an increase in depreciation, but we were able to offset this through savings on packaging and
material costs and higher prices.
In South Africa the region's largest beer market, Heineken established Brandhouse, a joint venture
with Diageo and Namibia Breweries. The creation of Brandhouse follows the acquisition by Diageo and
Heineken of a 28.9% stake in Namibia Breweries Limited in July 2003. Among its brands are premium
beers including Windhoek, Heineken, Guinness and Kilkenny.
This venture combines the sales, marketing and distribution of 40 top premium brands and its perform
ance so far confirms our belief that we have created a strong platform for future growth. Sales volume
of the Heineken brand in South Africa increased substantially. Also AmsteTs sales volume increased.
As part of this new venture, Namibia Breweries in Windhoek, Namibia, started brewing the
Heineken brand locally for Namibia, South Africa and other countries in the region.
Despite periodic unrest during the year, Brasseries, Limonaderies et Malteries in the Democratic
Republic of Congo reported strong volume growth in beer and soft drinks. The growth came thanks
to intense marketing activities to counter competitive pressures. A relatively stable exchange rate and
inflation also contributed to the positive performance.