SABMiller spends $80m on new Uganda brewery

SABMiller, the huge brewing company which owns the Grolsch and Miller brands, is to invest $80m in a new brewery for its Ugandan subsidiary, Nile Breweries.

The new facility will be constructed in Mbarara, western Uganda.

The total Ugandan beer market grew 28% over the 12 months to the end of December 2011, driven, SAB says, by strong economic growth and population expansion.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Average per capita beer consumption is at around eight litres per year, compared to an average of around 60 litres in South Africa.

The Mbarara site will employ around 140 people directly and will brew the bulk of Nile Breweries portfolio of beers, including Nile Special, Club Pilsener, Eagle Extra and Eagle Lager.

The development site is on the banks of the River Rwizi which will provide the water source for the brewery.

Mark Bowman, the Managing Director pointed out the development would double the company's production capacity in Uganda and provide a guaranteed revenue stream for local farmers.

SABMiller shares have gained 20% in the last 12 months.

BS