E-Malt.com News article: Tanzania: East African Breweries appoints new executives days after buyout of Serengeti Breweries

East African Breweries Limited (EABL) has made far reaching changes in the executive suite of Serengeti Breweries Limited (SBL) days after completing the buyout of a 51 per cent stake in the Tanzania’s beer firm, Business Daily communicated on November, 2.

The regional brewer has appointed a new managing director, finance director, marketing director and human resource director to help shore up the fortunes of SBL and strengthen its position in the ongoing war against South Africa’s SABMiller for control of Tanzania’s beer market.

EABL announced on October 26 that it had completed the purchase of SBL and that through its parent company, Diageo Plc, will acquire the remaining 49 per cent stake between February 2014 and July 2014.

The company tapped Richard Wells, formerly commercial director of BrandHouse, to replace Ajay Mehta, who quit office after the completion of the deal. Mr Mehta will remain an executive director for special projects.

The managing director will be assisted by Allan Hood, who becomes the finance director and he is joining EABL from Diageo where he was a finance director in charge of Jamaica.

Erick Adadevoh is the human resource director joining SBL from another Diageo affiliate — Guinness Ghana Breweries—while Carol Ndung’u assumes the role of marketing director after serving as marketing consultant for EABL.

“The following management appointments will provide SBL with the strong leadership needed to continue on a prosperous path,” Brenda Mbathi, EABL’s group corporate relations director, said.

“As we are now entering the Tanzania market as a fully fledged operating company we have looked to restructure the organisation with a view to align our processes and structures with the rest of EABL,” she added.

EABL has also taken control of SBL’s boardroom with Mr Seni Adetu, the EABL chief executive officer, Mr Hood, Mr Wells and Dr Nick Blazquez, the deputy group chairman at EABL taking seats in the board.

The talent shift highlights the growing quest by Diageo to capture a larger share of the East African market, reduce the Tanzanian market share of its rival SABMiller and cut its overreliance on the Kenyan market that has been showing signs of maturity.

Last year, the Kenyan market generated 83 per cent of the company’s profits.

The SBL is Tanzania’s second largest brewer with at least 28 per cent of the country’s total beer market. SBL owns two brewing plants and is constructing a third one - signalling its intention to grow market share.

EABL and SABMiller have been business partners in Tanzania on the strength of their co-ownership of Tanzania Breweries Limited (TBL) since 2002 but the Kenyan brewer last year opted to acquire rival Serengeti on claims that the partnership with the South African brewer was pulling back its operations.

By moving to rival SBL, UK brewing giant Diageo, which has a controlling stake in EABL, has not only opened a new battle front in Tanzania with SABMiller, but has also underlined the growing tussle for the Eastern Africa market between the twin multinationals.

SABMiller owns 60 per cent of Nile Breweries in Uganda where a battle for market dominance has been raging for nearly three years with Uganda Breweries, where EABL has a 98.2 per cent stake.

Recently, SABMiller front-run EABL in Southern Sudan with the opening of a Sh2.9 billion plant in Juba in an attempt to consolidate its presence ahead of the EABL’s plant that is set for construction next year.

Now, EABL has committed to spend millions of shillings to upgrade these facilities to its standards and allow it to produce and distribute its flagship products like Tusker, Guinness and Pilsner in the Tanzanian market.

Should the new partnership be cemented, EABL would have a chance to “aggressively” increase the sale of their brands in Tanzania — a market where beer consumption is growing at about 11 per cent — hence cushioning it against slowing sales in Kenya, its home market.

EABL will also sell SBL brands in markets outside Tanzania, especially SBL’s flagship Serengeti Lager, a premium beer targeting high and middle income earners, which accounts for 85 per cent of its revenues.


03 November, 2010