Africa: SABMiller invested US$750 million in African economies since 1994

The world over, suspicion of big business is high. In Africa, however, the attitude is sometimes down right hostile, in part because most of the biggest businesses are foreign owned, and that is a very emotional issue, The Nation (Kenya) Via Thomson Dialog NewsEdge announced September 01.

SABMiller, for example, have financial and beverage interests in 29 African countries, which includes those in which their strategic partner Castel, operates. SABMiller's South African beer and soft drinks business is run by the South African Breweries (SAB) Ltd. SAB's operations has had a substantial impact on the South African economy. In 2004, for example, the company injected an estimated US $1.6 billion into the South African economy. SAB employs some 8,232 people including those working in the soft drinks division.

For the African continent generally, SABMiller has injected US$266 million into African economies in taxes and salaries in 2004. The company employs 6,061 people in Africa alone and has invested in excess of US$750 million in African economies (including actual investment and capital expenditure) since 1994.

One promising example of SABMiller's investment into a local African economy is the creation of Eagle Larger by Nile Breweries, a subsidiary of SABMiller, in Uganda. Nile Breweries has successfully collaborated with the Uganda government and the Serere Animal and Agricultural Research Institute to create Eagle Larger - a project that has resulted in the creation of some 8,000 jobs for Ugandan farmers and the production of high-quality, low-cost sorghum beer that now enjoys a market share of over 20 percent.

Ugandan farmers took a huge risk by opting to grow sorghum for Nile Breweries. For subsistence farmers any mistake means the real possibility of starvation for them and their families. However, farmers received price guarantees US$155 per tonne, with purchase agreements signed in advance. So successful was the scheme that Nile Breweries went from 350 farmers growing sorghum to about 8,000. In 2004, those farmers produced 3,000 tonnes of sorghum, which is up from a mere 240 tonnes in the first year of operation, and sold it for 840 million shillings or about $450,000 US dollars.

In the eyes of the rich industrialized countries on the other hand, sub-Saharan Africa is still largely viewed as one big risky place in which to do business. Poverty, corruption, war, disease, incompetent governance, human rights abuses and poor infrastructure are the seven deadly sins for which the African continent is renowned, both at home and abroad.

06 September, 2006