adminGoetzsche, said in an interview, driven by planned expansion in output and exports.
With a 70 percent share of the market, TBL – a subsidiary of the world’s number two brewer SABMiller – is the leading brewer in a market that industry executives say offers the fastest growth rate in the region.
Noting TBL had an operating profit of US$124 million in the year through March 2011 on turnover of US$455 million, Goetzsche said: “We would expect to grow at or about or slightly above inflation and our expectation would be about 10 percent growth.”
He said TBL, in which SABMiller has a 53 percent stake, had invested up to US$40 million a year to expand its business. “In the last four years we have invested around US$300 million . . . and we spend between US$30 million and $40 million a year on capital,” he said.
Kenya’s East African Breweries , a unit of the world’s biggest drinks group Diageo, is in the process of selling its 20 percent stake in TBL to go it alone through another brewer, Serengeti. Goetzsche said TBL’s four breweries across Tanzania have a combined capacity of 3,5 million hectolitres, but the company was working on plans to expand output to 6,5 million hectolitres over the next decade and hoped to start exporting to neighbouring Kenya.
TBL ventured into the wine industry last November by introducing two new brands.
“They have been very well accepted by the market and selling nicely, although it’s early days,” he said.
Apart from its breweries in the Dar es Salaam, Arusha, Mwanza and Mbeya regions, TBL also owns a spirits and wines plant under its subsidiary, Tanzania Distilleries, in which TBL invested US$4 million this year to expand output.
A big concern for Goetzsche is the rise in the company’s operating costs due to rolling power blackouts in East Africa’s second-largest economy, where the state-run power company announced daily 12-hour power cuts for an unspecified period because of low water levels at hydropower dams.
“Certainly Mwanza has been the one that is hardest hit . . . Mwanza has had about 65 percent running on generators over the last few months. This has seen our running costs go up by around 20 percent on energy costs,” he said.
The International Monetary Fund cut its 2011 growth forecast for Tanzania to 6 percent from 7,2 percent in March, saying frequent power outages would hurt output while food and fuel prices could push inflation higher. – Reuters.
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