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Tanzania: Brewery Excels in Midst of Odds

Tanzania Breweries Limited (TBL) announced in a report circulated to shareholders last week that TBL group of companies sustained excellent performance during the year in spite of challenges associated with rising energy and fuel costs, the impact of drought, and instability of infrastructure especially electricity and water.

TBL Chairman, Mr Cleopa Msuya said the company’s performance "exceeded expectations with the group volume output rising in profit by 6% to over 2.4 million hectoliters" which translated to an operating profit of Tsh 86 billion (US$68.25 million) a 19% improvement over the previous year.

"Earnings per share increased from Tsh156.7 ($0.12) per share to Tsh193 ($0.15) per share - which was an improvement of 23% over the last year," the chairman said.

Payment to the Tanzania government coffers also increased from Tsh101 billion ($80.15 million) to Tsh122 billion ($96.82 million) - being an increase of 21% over the previous year.

TBL, a former state-owned brewery, has sustained increasing performance and profitability over the years since it was privatised in 1996 to the South African Breweries Limited (SAB) ltd.

TBL principal activities are production, distribution and sales of malt beers and alcoholic fruit beverages in Tanzania. It operates three breweries in Dar, Mwanza and Arusha. It also operates the Tanzania Distilleries Limited in Dar - a spirituous liquor company and two traditional beer plants in Dar and in the south-western municipality of Mbeya.

The Group produces its own brands of such beers as: Safari Lager, Kilimanjaro Premium Lager, Konyagi (spirit) and Kibuku (traditional beer), however, the company also produces under licence Castle Lager, Castle Milk Stout and Redds Premium Cold.

TBL produces other brands that were owned by the East African Breweries Limited (EABL) including Tusker Lager, Pilsner Lager, Guinness FES and Guinness Malta. The EABL business in Tanzania was bought out by TBL a few years ago.

TBL Managing Director, Mr Justice O’Donovan, attributed the sales revenue growth of 13% and an operating profit of 19% over the previous year to "organic growth in clear beer, wines and spirit volumes."

He also attributed the success to the maximization of utiliSation of plants that were running at 95% which enhanced production. At take over in 1996, the TBL capacity utilisation was well under 20%.

TBL has been constantly investing in innovations and improvements of capacity. Apart from returnable glass containers, TBL has since last year introduced new packaging graphics upgrade of some of its brands and now used non-refundable bottles for some brands.

James Mwakisyala

allAfrica - 4 July 2006
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