AB Inbev, world leading Brewery Company, in a move to increase its foothold in Nigeria, plans to establish a $400m mega plant in Nigeria. The investment is part of strategy to consolidate on its merger with SAB Miller and challenge Nigerian Breweries and Guinness Nigeria, both of whom currently control the beer market.
AB InBev is also working to gain market penetration with some of its brands that are yet to gain full presence in Nigerian market. Nigeria is one of the most populous countries in the world, according to United Nations; the country is set to become the world’s third largest population by 2050. Nigeria’s beer market is also growing significantly than any other African country.
One of the principal reasons for the takeover of SABMiller by AB InBev was to tap into the growth opportunities in the African beer market and especially Nigeria. According to analysts, beer consumption in the developed world has been on the wane for some time. In the US and Brazil, which accounts for half of AB InBev’s revenue, beer volumes fell 3.9% over the first-half of 2015 to 80.5m barrels, from 83.7m barrels.
AB InBev’s African CEO, Ricardo Tadeu told Bloomberg recently that the company is “prioritizing what we need to do in Africa, rather than trying to find new things”.
Ricardo explained that the company intends to expand African presence by showing to the world that African beers have something unique to show the world. The company also plans to introduce Stella Artois and Budweiser, two of some of its largest and high performing beer brands.
Beside the investment in Nigeria, AB InBev has revealed that it within the next 12 months, it plans to invest between $150 million and $200 million on two new production lines in South Africa as it looks look for cost cutting opportunities.
Meanwhile, SAB Miller’s Trophy and Hero beers are doing great in the market and are flavourably competing with Nigerian Breweries’ Goldberg and Life.