34
REGIONAL REVIEW - AFRICA AND THE MIDDLE EAST
SOUTH AFRICA:
OPPORTUNITY
KNOCKS
REPORT OF THE EXECUTIVE BOARD
HEINEKEN N.V. ANNUAL REPORT 2008
NIGERIA
Consolidated beer volume
Market share
Market position
9.8 million hectolitres
67.1 per cent
1
Heineken operates in Nigeria through controlling stakes in
Nigerian Breweries and Consolidated Breweries of Nigeria,
and enjoys an estimated market share of 67 per cent.
Combined volume grew 17 per cent.
Revenue and EBIT (beia) grew in excess of 30 per cent,
thanks to the combination of higher volume, an average
6.5 per cent price increase and the positive effect of cost
control. Volumes of Star and Gulder in the mainstream
segment experienced double-digit growth and the Heineken
brand grew 60 per cent. Higher volumes were driven in
part by the introduction of cans for several brands, and the
introduction of new packaging for Amstel Malta and Legend.
Nigerian Breweries installed a second canning line and can
introductions for other brands are under way.
The introduction of Fayrouz, a malt-based soft drink, is also
proceeding according to plan, with total sales of 180,000
hectolitres (+40 per cent).
EGYPT
Consolidated beer volume
Market share
Market position
1.2 million hectolitres
92.7 per cent
1
The beer market showed another year of strong growth,
increasing 8 per cent, driven by a growing tourist sector.
Al Ahram performed well, significantly increasing EBIT (beia),
driven by higher beer volumes, better pricing and rigorous
cost cutting.
The Heineken brand grew 28 per cent, whilst the Sakara
brand, which is particularly strong in tourist areas, also
reported good growth. The national mainstream brand,
Stella, developed well after its earlier re-launch.
Africa and the Middle East is
Heineken's fastest-growing region
with both mature and developing
beer markets contributing to
growth. South Africa is one of the
region's largest beer markets and
has a fast-growing premium
segment driven by economic
growth and the emergence of an
influential middle-class consumer.
To capitalise on this growth,
in 2004, Heineken established
a joint venture with Diageo and
Namibia Breweries, to form the
joint marketing and distribution
company brandhouse. The
business has grown rapidly
alongside the growth of the
Heineken brand.
To further build its presence in
this important beer market, in
2007, Heineken regained control
of the Amstel brand - the
country's leading premium
beer - and immediately set about
creating a new route to market.
Initially, the brand would be
brewed by traditional Amstel
brewers in Europe, imported and
sold through brandhouse. At the
same time, Heineken announced
its decision to invest in building a
new brewery.
The brewery is a joint venture,
75 per cent owned by Heineken,
25 per cent by Diageo and is
on schedule to be operational
towards the end of 2009. The
initial capacity of 3 million
hectolitres has the built-in
flexibility to expand as demand
for the portfolio of beer brands
increases.
The 80-hectare site, located
south-east of Johannesburg,
will comprise production buildinc s
and cool cellars, as well as a
bottling and distribution
warehouse. When operational,
the brewery will create around
225 permanent new jobs at all
levels as well as a considerable
number of outsourcing
opportunities for local suppliers.
This reflects our commitment
to invest in and work with the
communities and markets in
which we operate.