United Kigdom and South Africa-listed SABMiller, one of the world’s largest brewers by volume, has established two separate joint ventures with its pan-African partner the Castel Group in the French speaking territories of Algeria and Morocco, at a total cost to the group of $46-million, the company announced on Thursday.
SABMiller said the Algerian joint venture had been effected by the company acquiring a 25% direct interest in two Castel carbonated soft drink plants and one brewery in Algeria, together with a 15,78% stake in a second brewery, in which Castel is a majority shareholder.
The Moroccan joint venture, meanwhile, had been effected by SABMiller acquiring a 25% interest in a holding company which has controlling interests in three breweries, a malting plant and a wet depot in Morocco. Given SABMiller’s existing 20% stake in Castel’s African operations, the new joint ventures are effectively owned 60% by Castel and 40% by SABMiller.
SABMiller’s direct investment in the joint venture businesses comprises $25-million in the Algerian joint venture and $21-million in the Moroccan joint venture. The initial impact of the transaction on SABMiller’s earnings and gearing is expected to be neutral, the brewer said.
The day-to-day operations of the joint ventures will be managed by Castel, which has a significant presence and expertise in French speaking Africa. The parties will cooperate in a number of important areas such as procurement and new technical initiatives, while drawing on the resources of the respective groups.
For the year ended December 31, 2003, the Algerian and Moroccan businesses included in the joint ventures generated sales of $86-million, comprising 1,2-million hectolitres of lager beer and 900 000 hectolitres of carbonated soft drinks. – I-Net Bridge