Uganda has significant growth opportunity

You have been at Nile Breweries for three years. What is your experience so far?
I have had a predominantly financial background working for SABMiller for the last 12 years of which the last five years have been in East Africa. My experience with Nile Breweries in the last three years has been great and I have thoroughly enjoyed working for NBL and working in Uganda.
I have found our employees to be enthusiastic with a “never say die attitude” and most of the people see glasses as “half full” and what can still be achieved.

Where do you see NBL headed considering the outlook of the EA economy
NBL has grown its market share consistently for the past eight years through the investments it has made in its well-known brands and its capacity expansions of its plants in Jinja and Mbarara.
This trend I believe will continue into the future considering that East Africa and especially Uganda is investing in infrastructure through the expansion of its power generation, roads and railways. This development will bring significant investment into the country, which will lift the GDP and per capita incomes of the population. There is a growing middle class and the rural areas are becoming more accessible and farming practices are improving. All of this growth will result in more consumers being able to purchase beer and move away from the informal alcohol market.
NBL with its new brewery and its world class brands are poised to capture this growth. I believe NBL will continue to expand and grow its market share into the future.

How does the beeralcohol industry in Uganda compare to others, especially in EA?
In Uganda, a large proportion of the beer consumers have low incomes. This results in Uganda having higher volumes of the beer sold in the “value for money” segment than other parts of Africa and East Africa. Furthermore the annual per capita consumption of beer is relatively lower than the countries in Southern Africa but similar to other countries in East Africa. In Uganda many people still drink home brews and are not part of the formal beer market. On the other hand there is a growing middle class who are changing their consumption patterns to the more premium beers, this is consistent with the rest of Africa.

What are some of the challenges faced in the beer industry?
I believe there are two challenges facing the beer industry in Uganda.The first is supply of local barley and NBL has invested significantly in developing and training farmers to grow barley to break our dependence on importing the raw material.
The second is the poor road infrastructure in the rural areas especially during the wet seasons where roads become impassable which prevents the delivery of beer and the collection of barley and sorghum from the many areas within Uganda.
Uganda and other countries in East Africa also have a relatively high excise tax per weighted average unit of consumption. This means that the beer sales in Uganda are either lower than the potential or that margins are less than other countries in East Africa.

SOURCE: Daily Monitor

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