NBL RETAINS MARKET DESPITE COMPETITION

By Rosalia David
April 2016
Women in Business

Namibia Breweries Limited (NBL) Managing Director, Wessie van Westhuizen, says the local brewing firm has not lost market space since the establishment of a manufacturing plant by their main competitor, SABMiller, in Okahandja.

He argues that SABMiller has been a major player in the local market over the last 20-years and that the eventual establishment of an operational base in Okahandja has not in any way upset the market for NBL.

“I would like to believe that we have done very well to keep our market space in the country and as far as we are concerned, SABMiller are not in any way competition to us. We do respect their abilities and their market space but we have established a visible footprint in the market and we do not believe that any new entrant will make us lose,” he says.

According to van Westhuizen, NBL has managed to consolidate its market foot print in Namibia and most of their alcoholic beverages including Windhoek Lager, Tafel Lager and Windhoek Draught are gaining popularity across the country. In a bid to widen their market reach, the NBL brand also distributes other alcoholic beverages including Amstel Lite and Heineken.

SABMiller, one of the world’s largest beer brands, set up a brewing plant in Namibia with the hope of taping into a market that was dominated primarily by NBL.

SABMiller’s ambitions notwithstanding, a rather upbeat van Westhuizen, whose company achieved phenomenal growth rates in the past six months, reiterates that, “With regards to the King Beer, we believe we might not have reached that target that we set as yet but it is our belief that we will eventually surpass our target. So in a nutshell the brand has not yet met market expectations that we laid down and we believe the work is in progress,” he says.

While SABMiller has a significant footprint regionally and internationally for their popular brands including Castle Lager, NBL’s brands including Windhoek and Tafel Lager have proved popular locally, while also making significant inroads regionally.

The NBL MD also reiterated that the company has now made significant inroads in tapping into the Namibian skills. According to the latest information provided; the company now has a local staff complement of 98%. The performance of some of their brands has been popularized by the use of local celebrities as brand ambassadors. NBL signed Gazza on a two year contract as a brand ambassador for Windhoek Draught while Oteya is currently pushing the Vigo brand.

NBL also recorded an increase of N$1.3 billion for the last financial year while their operating profit scaled up to N$308 million indicating an improvement of 5 percent as compared to 2014.

The company also confirmed in their half year financial results that their share increased by 37 percent, headline earnings per share also went up by 6 percent while the shareholders are expected to go home smiling with dividend per ordinary share of 40 cents.

While the company shows traits of brilliant performances in the local market and also significant growth from the market, it acknowledged that its growth has not been that encouraging in the Southern African Development Community (SADC), especially in Zambia. According to Westhuizen the Zambian market has been a challenge because of the volatile economic conditions faced by that country. Zambia has been going through a tough economic period which has seen their local currency, the Kwacha, losing significant value in the past year.

NBL however made significant inroads in the South African market where about 22 percent of their products were sold.

Corroborating his MD’s sentiments, NBL Financial Director, Graeme Mouton, said, “NBL delivered solid results which points to the strength of the group’s capabilities to deliver on key business drivers in an increasingly challenging environment. NBL’s strategy is to continuously focus on partnering with our local, export and South African key markets,” he says.

He also added that, “NBL will continue to re-invest into the growth and development of our human capital and thereby further building further building Namibian skills capacity.”

NBL’s other growth strategy is to execute the mitigation plan in order to reduce dependency on public water as the country faces water challenges.

“We will continue to invest in boreholes, volume migration to South Africa, and with the water reclamation plant and pre-treatment plant,” he says.

NBL also aims to remain committed to government’s vision of the growth at home strategy and the objective for vision 2030 and to strengthen the company’s portfolio of brands.