E-Malt.com News article: Nigeria: SABMiller to triple output capacity at its Onitsha brewery in response to robust demand for Hero Lager

At the Estate Sports Club in the southeastern Nigerian city of Onitsha, men troop up to the open-air bar and order a bottle of "Oh Mpa", the local name for SABMiller’s Hero beer. It means "Oh Father" in Igbo, and is widely regarded as referring to the late Chukwuemeka Odumegwu-Ojukwu, who led a failed attempt to secede from Nigeria in the 1960s and set up an independent nation of Biafra that sparked a 30-month civil war, Business Day Live reported on April 11.

In response to robust demand for Hero Lager and other drinks, SABMiller plans to invest $110 mln to triple its output capacity at the 18-month-old Onitsha brewery, to 2.1-million hectolitres a year.

Nigeria, Africa’s most populous country with about 170-million people, is the continent’s second-largest beer market after South Africa, growing at an annual volume of 6%, SABMiller says.

The company, which has brewing or beverage interests in 32 African countries, entered the Nigerian market in 2009 with the purchase of controlling interests in Pabod Breweries, based in the southern oil hub of Port Harcourt.

SABMiller is competing in Africa’s top oil producer with rivals including Diageo, which since 2007 has sold more Guinness in Nigeria than in the beer’s native Ireland; and Heineken, which controls Nigeria Breweries, the country’s biggest brewer.

While Nigerian Breweries and Guinness Nigeria, the number two, have experienced slower growth because of higher fuel prices and depressed consumer income since 2012, SABMiller is pushing lower-cost products, according to industry analysts.

Hero is as much as 40% cheaper than rival lagers.

"SABMiller’s approach of going down the price ladder widened their revenue base given the subdued state of consumer incomes over the last two years," says Adewale Okunriboye, an analyst who covers the industry at Lagos-based Assets Resource Management.

With its Hero bottles bearing the rising sun that appeared on the Biafran flag, SABMiller is tapping into the area’s nationalism. "While Ojukwu was alive, he was addressed as the hero of the Igbo race," Okwudili Otti, a machine-parts importer, says as he sips a Hero Lager in a group of middle-aged men, sitting on plastic chairs watching a soccer match on wall-mounted television screens. "He was given that respect."

Ojukwu died in November 2011 at the age of 78, and memories of him and the stillborn Biafra republic remain strong among the Igbo, one the three biggest ethnic groups in Nigeria, numbering more than 40-million.

It’s not simply nostalgia SABMiller is appealing to today, says Emeka Uzoatu, who is a writer and sells agricultural tools in Onitsha, a bustling market town on the eastern bank of the Niger River.

"It’s not really the older people who drink Hero, it’s the younger ones," he says at his office on Port Harcourt Road. "They didn’t experience Biafra and they like to hear about it."

While SABMiller says the presentation of Hero beer carries no political motivation, it is aiming to create a "local feel" for its beverage. "Hero was developed as a result of deep local consumer insight and positive associations with the Igbo tribe," it says.

"There is no historic or political motivation behind the brand and it is in no way designed to represent a political view."

The civil war broke out in May 1967 following a coup the previous year led by mainly Igbo junior officers against a government dominated by northern Muslims.

The mutineers murdered the prime minister, Abubakar Tafawa Balewa, and northern premier Ahmadu Bello.

That prompted a revenge coup six months later and the massacre of tens of thousands of Igbos across northern Nigeria.

Ojukwu, then military governor of the region, declared the Republic of Biafra independent in May 1967, taking along the country’s nascent crude oil production in the Niger delta. A civil war ensued as the federal government fought to bring Biafra and the oil fields back into the fold with the backing of the UK and former Soviet Union. By its end in 1970, more than 1-million people had died in violence and famine.

The dream of nationhood for the Igbos has been commemorated in books such as Half of a Yellow Sun, which won author Chimamanda Ngozi Adichie the 2007 Orange Prize for Fiction and was made into a film starring Thandie Newton and Chiwetel Ejiofor. The war has also featured in the writings of Nobel laureate Wole Soyinka, Chinua Achebe and JP Clark.

A giant statue of Ojukwu in military uniform with a rifle slung over his shoulder stands at the driveway of SABMiller’s brewery in Onitsha, Anambra state’s biggest city with more than 1-million people. It was erected by former Anambra state governor Peter Obi, a member of the political party that Ojukwu set up in 2003, the All Progressives Grand Alliance.

In Onitsha, Nigerian Breweries last year bought Life Breweries and is pushing the Life brand to compete with Hero.

"Regional tastes, loyalties and traditions may inspire the growth of regional brands, which the big brewers will eventually have to embrace to remain competitive," says Efemena Esalomi, an analyst at Lagos-based Vetiva Capital Management.

Mr Otti, dressed in a polo shirt and shorts, appears to agree with that analysis. "We needed a beer brand we could trust, that we could call our own," he says as he raises his glass to his lips for a gulp. "This is ours; ours is ours!"


11 April, 2014