Download the Corporate Citizenship Review 1999 ... - SABMiller

SOUTH AFRICAN BREWERIES plc 

C ORPORATE 

C ITIZENSHIP 

R EVIEW 

1999

Contents 


1 CORPORATE HIGHLIGHTS 

Mission Statement 

2 CORE OPERATING COMPANY HIGHLIGHTS 

4 MESSAGE FROM THE GROUP CHIEF EXECUTIVE 

6 LAYING THE FOUNDATIONS 

SAB IS AN INTERNATIONAL COMPANY COMMITTED 

TO ACHIEVING SUSTAINED COMMERCIAL SUCCESS, 

PRINCIPALLY IN BEER AND OTHER BEVERAGES, 

12 BUILDING THE BONDS 

BUT WITH STRATEGIC INVESTMENTS IN HOTELS AND 

28 BUILDING THE BRIDGES 

40 LINKING THE PROFITS 

42 GROUP CASH VALUE ADDED 

GAMING. WE ACHIEVE THIS BY MEETING THE 

ASPIRATIONS OF OUR CUSTOMERS THROUGH 

QUALITY PRODUCTS AND SERVICES AND BY SHARING 

FAIRLY AMONG ALL STAKEHOLDERS THE WEALTH 

AND OPPORTUNITIES GENERATED. THEREBY, WE 

FULFIL OUR GOALS OF BUSINESS GROWTH AND 

MAXIMISED LONG-TERM SHAREHOLDER VALUE, 

WHILE BEHAVING IN A SOCIALLY RESPONSIBLE AND 

PROGRESSIVE MANNER. 

South African Breweries plc 

Incorporated in England and Wales under 

the Companies Act, 1985 

Registration number 3528416

Corporate Highlights 

DURING THE PAST FINANCIAL YEAR: 

• Underlying rand operating profits were up 25 per cent, 

reflecting real earnings growth and productivity gains 

• Lager beer volumes grew 9 per cent to 48 million hectolitres 

• The core businesses gained market share and improved 

operating margins 

• A US$322 million share placement marked entry into the FTSE 

100 index and broadened our international shareholder base 

COMPONENTS OF VALUE ADDED AND DISTRIBUTED 

CASH GENERATED 

• SALE OF PRODUCTS 

• PAYMENT FOR SUPPLIES AND SERVICES 

STAKEHOLDERS 

• CUSTOMERS/CONSUMERS 

• SUPPLIERS 

• CASH VALUE ADDED 

CASH UTILISED 

• REMUNERATION 

• STATE TAXES 

• SOCIAL INVESTMENT 

• INTEREST/FINANCE COSTS 

• DIVIDENDS 

• EMPLOYEES 

• GOVERNMENT 

• COMMUNITY/ENVIRONMENT 

• LENDERS 

• SHAREHOLDERS 

• CASH DISBURSED 

CASH UTILISED 

• FUNDING OF GROWTH AND REPLACEMENT 

• MANAGEMENT 

PAGE ONE 

CORPORATE CITIZENSHIP REVIEW

Core Operating Company Highlights 

Beer South Africa 

Beer South Africa – one of the lowest cost beer producers in the world – is the 

major brewer in South Africa, the ninth largest beer market in the world by 

volume. In the year ended 31 March 1999, Beer South Africa sold 25.6 million 

hectolitres of beer and increased its liquor market share by some two percentage 

points. 

UNITED KINGDOM 

SAB International 

CANARY 

ISLANDS 

SABI has operations in 19 countries, with 32 breweries, 37 sorghum breweries and 

12 soft drink bottling plants. Its focus is on sub-Saharan Africa, China and central and 

GHANA 

eastern Europe. Sales for the 12 months to March 1999 reflect growth in lager beer volumes 

of 19 per cent over the previous period, as output rose to some 22 million hectolitres. 

PAGE TWO

Other Beverages 

The Other Beverages interests comprises Amalgamated Beverages Industries, in 

which SAB plc has a 65 per cent interest – the largest Coca-Cola and Schweppes 

bottler and distributor in South Africa – with a market share of approximately 

60 per cent; Appletiser SA, a natural, non-alcoholic sparkling fruit juice and 

bottled water producer; and the Group’s 30 per cent holdings in each of Distillers 

Corporation and Stellenbosch Farmers’ Winery, two dominant manufacturers and 

distributors in the South African wines and spirits sector. 

RUSSIAN 

FEDERATION 

POLAND 

SLOVAKIA 

HUNGARY 

ROMANIA 

CHINA 

Hotels and Gaming 

UGANDA 

KENYA 

SAB plc owns Southern Sun, one of the largest hotel operators in 

Africa with 75 hotels and 12,600 rooms, which holds the 

exclusive right to the Inter-Continental and Holiday Inn brands 

ANGOLA 

ZAMBIA 

TANZANIA 

MOZAMBIQUE 

SEYCHELLES 

in South Africa. 

Southern Sun has also entered into strategic alliances with 

BOTSWANA 

SOUTH 

AFRICA 

ZIMBABWE 

SWAZILAND 

LESOTHO 

influential empowerment consortia and holds a 50 per cent 

interest in Tsogo Sun, which currently operates three casinos 

in South Africa and is interested in applying for further 

gaming licences. 

PAGE THREE 


Message from the Group Chief Executive 

Last year my report focused on the foundations of the Company – our proud history of over 100 years, the knowledge 

and skills of our people and the values and principles – which have underpinned our growth. 

Building on this heritage, SAB continues to follow a strategy of development, as evidenced last year by 

restructuring our core businesses with significant additional investments in beer in emerging markets, and the 

Company’s primary listing on the London Stock Exchange (LSE). 

These changes have given rise to many challenges, not only in terms of maintaining total shareholder returns, 

but also in meeting our responsibilities to all our newly acquired and existing stakeholders, in compliance with the 

LSE Combined Code’s Principles of Good Governance and Code of Best Practice and in our ongoing acceptance of 

corporate responsibilities around the world. 

We consider this second edition of our Corporate Citizenship Review to be transitional, while formal systems are 

being developed for monitoring and measuring our ethical, social and environmental performance. It is intended that 

in future this process will involve all of our operations, but this year we have only included aspects of each of the four 

main operating companies in the Review. Our associated company, Delta Corporation in Zimbabwe, publishes its own 

social, health, safety and environmental, as well as employee reports. 

Continual attention is being given to central issues, including: 

• Managing the social aspects of products and services, particularly alcohol and gaming abuses. 

• Responding to human rights issues, such as equity in the workplace and in community relations. 

WEALTH IS NOT CREATED IN A VACUUM. 

OUR COMMITMENT TO GENERATING PROFITS 

IS MATCHED BY OUR REGARD FOR GOOD 

CORPORATE CITIZENSHIP. 

• Communicating openly and transparently, utilising strong and trusted in-depth stakeholder relations, 

accountability and corporate communication teams to address: 

– internal communication, 

– external communication, and 

– stakeholder inclusivity. 

PAGE FOUR

• Providing service excellence in addition to manufacturing safe, quality products. 

• Managing the Group’s environmental impact in such areas as waste, emissions, discharges and the effective use 

of energy. 

• Maintaining preventative health and safety structures for employees and support for surrounding communities. 

• Binding our stakeholders and partners to our ethics. 

• Adhering to legislative and regulatory compliance, for example, in our market behaviour, competition policies, 

accounting standards and reporting. 

• Contributing actively to the well-being of the communities in which the Group operates (in addition to the economic 

contributions generated by business operations) through, inter alia, sound corporate social investment programmes. 

• Identifying, monitoring and managing all known forms of risk. 

In line with these concerns, and bearing in mind that the fundamental purpose of business is to create wealth, we 

have again included a Group Value Added statement, which outlines the components of value added and distributed 

among our shareholders and various stakeholders – our employees, customers, consumers, suppliers, communities, 

lenders of capital and, in terms of the environment, future generations. 

Wealth is not created in a vacuum. Our commitment to generating profits is matched by our regard for good 

corporate citizenship. To give meaning to this, I have established a Corporate Accountability Committee which will 

oversee the work of a dedicated Group accountability department, as a reflection of senior management’s commitment 

to the development of best practice in ethical, social, economic and 

environmental accountability. 

Accepting that it will not always be possible to meet our targets, I feel 

satisfied that we are making distinct progress in the right direction. 

GRAHAM MACKAY ● GROUP CHIEF EXECUTIVE 

30 September 1999 

PAGE FIVE 


Laying 

the Foundations... 

Corporate Governance 

We are committed to an open governance process, through which our shareholders may derive the assurance 

that, in protecting and adding value to SAB’s financial and human investment, the Group is being managed 

ethically, according to prudently determined risk 

parameters and in compliance with best international 

practices. 

In South Africa, the leading business publication, 

Financial Mail, compiles an annual survey that measures 

• CORPORATE GOVERNANCE ▪ SAB IS COMMITTED TO AN 

OPEN GOVERNANCE PROCESS, WHICH PROTECTS THE VALUE AND 

REPUTATION OF THE COMPANY BY MANAGING THE BUSINESS 

EFFECTIVELY AND IN COMPLIANCE WITH LEGAL REQUIREMENTS 

AND BEST PRACTICE IN GOVERNANCE. 

the credibility and transparency of listed companies. SAB itself has 

featured in the top 20 so many times that it now appears permanently 

SAB WAS THE WINNER OF THE THIRD ANNUAL CORPORATE 

GOVERNANCE AWARD, SPONSORED BY THE AUDITING FIRM 

DELOITTE AND TOUCHE AND THE JOHANNESBURG STOCK 

EXCHANGE (JSE). THE AWARD RECOGNISES ACHIEVEMENT IN 

GOOD GOVERNANCE PRACTICES AMONG PRIVATE AND PUBLIC 

SECTOR ORGANISATIONS IN SOUTH AFRICA. 

in the Roll of Honour. This year’s winner was subsidiary ABI, which 

moved up from fourth place in 1998. 

The prominent Investment Analysts’ Society in South Africa honoured ABI for its financial reporting and 

communications during the year, judging it the winner of the industrial/consumer category in the society’s 

annual competition. 

PAGE SIX

In addition, the SAB Group was the winner of the 1998 South African Corporate Governance Award, which is 

sponsored annually by a prominent auditing firm and the Johannesburg Stock Exchange. 

THE BOARD AND BOARD COMMITTEES: 

The executive directors generally have responsibility for making and implementing operational decisions on running 

the Group’s businesses. Non-executive directors support the skills and experience of the executive directors and 

contribute to the formulation of policy and decision-making 

through the knowledge and experience of other businesses 

and sectors. All directors bring independent judgement to the 

issues of strategy, performance, resources, including key 

appointments and standards of conduct. 

• COMPLIANCE WITH LAW ▪ SAB COMPANIES MUST COMPLY 

WITH THE LAWS AND REGULATIONS OF THE COUNTRIES IN WHICH 

THEY OPERATE. IN PROTECTING COMMERCIAL INTERESTS AND 

INFLUENCING GOVERNMENT POLICIES, SAB COMPANIES MAY NOT 

ENGAGE IN PARTY POLITICAL ACTIVITY. 

Board Committees: 

The principal Board committees are as follows: 

The Audit Committee 

The committee has the power to examine any matter 

relating to the financial affairs of the Group in accordance 

with its written terms of reference. This includes 

reviewing the annual accounts, internal financial 

control procedures, accounting policies, compliance 

and regulatory matters, recommending the appointment of the external auditors and other related issues. 

The audit committee reviews at least annually, with management, that adequate and appropriate internal 

financial controls are in place and are appropriate to meet future needs; that significant business, statutory and 

financial risks have been identified and are being monitored and managed; that appropriate standards of governance, 

PAGE SEVEN 


Laying the Foundations 

(CONTINUED) 

reporting and compliance are in operation; and it advises the Board on issues relating to the application of accounting 

standards to published financial information. 

The primary mandate of the Group’s internal auditors is to examine and evaluate the effectiveness of the 

applicable operational activities, the attendant business risks (including Year 2000) and the systems of internal 

financial control, so as to bring material deficiencies, instances of non-compliance and development needs to the 

attention of the applicable audit committee, external auditors and operational management for resolution. 

The Nomination Committee 

The committee considers the composition of the Board, retirements and appointments of additional and replacement 

directors, and makes appropriate recommendations to the Board. Executive directors are considered for appointment 

to the Board on the basis of their experience, skills and level of contribution to and impact on the Group. Non-executive 

directors are selected for recommendation on the basis of industry knowledge, professional skills and experience. 

Where appropriate, the directors believe that significant shareholders in the Company should be represented 

on the Board. 

The latter are not “independent” for the purposes of the strict interpretation of 

the Combined Code – but, in practice, all directors exercise a strong independent 

approach to Board responsibilities. 

The Remuneration Committee 

The remuneration committee’s overall strategy is to ensure that employees are 

rewarded for their contribution to 

SINCE THE INCEPTION OF SAB’S 

YEAR 2000 COMPLIANCE PROGRAMME 

THREE YEARS AGO, THIS BUSINESS ISSUE 

HAS RECEIVED FOCUSED ATTENTION 

FROM GRASS ROOTS TO BOARD LEVEL, 

TO REVIEW THE STATE OF COMPLIANCE 

OF INFORMATION TECHNOLOGY, 

GENERAL BUSINESS PROCESSES 

AND THOSE OF THE CUSTOMERS 

AND SUPPLIERS OF THE GROUP. 

the Group’s operating and financial performance at levels which take 

account of industry, market and country benchmarks, as well as the requirements of collective 

bargaining. In order to promote an identity of interests with shareholders, share incentives are considered to be critical 

elements of executive incentive pay. 

PAGE EIGHT

ACCOUNTABILITY AND AUDIT 

Internal Financial Controls 

The Board of Directors has overall responsibility for the Group’s systems of internal financial control. The directors 

consider that the systems are appropriately designed to provide reasonable, but not absolute, assurance that assets are 

safeguarded against material loss or unauthorised use, transactions are authorised and recorded properly and that 

material errors and irregularities are either prevented or detected within a timely period. The key elements of the 

Group’s internal financial control systems are: 

• Risk management; 

• Financial and treasury controls; 

• Operational and compliance controls; and 

• Monitoring process. 

• BRIBERY AND CORRUPTION ▪ SAB BEHAVES WITH 

INTEGRITY IN ITS BUSINESS CONDUCT AND WILL NOT ENGAGE IN, 

OR TOLERATE, ANY CORRUPT PRACTICE. 

Non-financial controls 

Following SAB’s proactive decision to report externally on 

the ethical, social and environmental aspects of 

the Company’s performance – albeit that 

progress has been slower than desired – 

we have to date formalised our activities by 

the appointment of a dedicated Group 

THE FIRST SAB PLC BOARD MEETING. 

Corporate Accountability Department, which is strengthened by a Corporate Accountability 

Committee comprising senior executive management. Representatives of the Committee 

include the Group Chief Executive and core business CEOs, and, by invitation, an 

independent non-executive director. 

PAGE NINE 


Laying the Foundations 

(CONTINUED) 

It is the responsibility of the Corporate Accountability Committee to ensure that: 

• ethical, social and environmental accountability is an integral part of the business by means of encouraging and 

monitoring progress across the Group; 

• the internal control and compliance environment in this arena is adequate and effective; and 

• that the principles, policies and practices adopted in the preparation of the Group’s accountability function and communication 

to stakeholders complies with all statutory requirements and strives to meet international best practice. 

In addition, the Corporate Accountability Committee shall examine any matters that are referred to it by the Board or 

that may appear necessary. 

Given that social accounting is a younger and more disparate discipline than financial accounting, SAB 

has adopted a flexible approach that will evolve over time. In the absence of international consensus on social 

accounting, the Group will nonetheless monitor progress, moving towards what is generally accepted as good practice. 

During calendar 1999, phase one of the corporate accountability strategy is being introduced to the operating 

companies where SAB has management control. Within an agreed framework – based on the company values and 

business principles – ethical, social and environmental issues have been identified for future measurement, 

monitoring and reporting. 

In this initial phase the Group Values and Principles were reviewed, taking into account the standards already 

set by our operating companies. The Group has designated an inner core of non-negotiable values with regard to 

integrity, honesty and our responsibilities to society, while the subsidiary companies may specify additional standards 

relating to their specific circumstances. 

Through this process, SAB has ensured that there is consistency across the Group. The Group’s values and 

principles are stated, and treated, as the reality rather than a distant ideal, but we recognise the inevitability of lapses 

and shortcomings. We commit ourselves to learning from mistakes and to continual improvement. 

PAGE TEN

Our Company Values, as listed below, guide us in our relations with all those who have a direct interest in 

the business – our stakeholders – and inform the Business Principles (highlighted throughout this Review) which 

govern those relationships. 

• WE CONDUCT OUR BUSINESS WITH INTEGRITY, RESPECTING ALL APPLICABLE LAWS. 

• WE ARE STRAIGHTFORWARD AND HONEST IN THE COMMITMENTS WE MAKE: SEEKING MUTUALLY 

BENEFICIAL AND ENDURING RELATIONSHIPS; AND BEING OPEN AND ACCURATE IN OUR COMMUNICATION. 

• WE RESPECT THE RIGHTS AND DIGNITY OF INDIVIDUALS. WE VALUE CULTURAL DIVERSITY AND PROMOTE 

INCLUSIVITY THROUGH EMPLOYEE PARTICIPATION AND EMPOWERMENT. 

• WE OPTIMISE THE CREATION OF WEALTH TO PROVIDE FAIR REWARD, AND RECOGNITION, FOR THE 

CONTRIBUTIONS OF ALL OUR STAKEHOLDERS. 

• WE CREATE AND SUSTAIN A SAFE AND HEALTHY WORKING ENVIRONMENT THAT, IN ADDITION, 

PROVIDES JOB SATISFACTION AND THE DEVELOPMENT OF EACH EMPLOYEE’S POTENTIAL. 

• WE PROVIDE PRODUCTS AND SERVICES OF UNCOMPROMISING QUALITY TO MEET THE NEEDS OF 

OUR CUSTOMERS. 

• WE ARE A RESPONSIBLE CORPORATE CITIZEN AND FULFIL OUR RESPONSIBILITIES AS AN INTEGRAL 

MEMBER OF SOCIETY. IN OUR BUSINESS DECISIONS, WHILE ASSERTING OUR RIGHT TO TRADE FREELY, 

WE GIVE APPROPRIATE CONSIDERATION TO SOCIAL AND ENVIRONMENTAL IMPACTS. 

• WE EXPECT THESE COMPANY VALUES TO BE UPHELD BY ALL EMPLOYEES AND BY THE THIRD PARTIES 

WE ENGAGE TO ACT ON OUR BEHALF, SUCH AS OUR SUPPLIERS, CONTRACTORS AND OTHER AGENTS. 

IN JOINT VENTURES, WE SEEK TO ENSURE THAT OUR BUSINESS PARTNERS APPLY THESE VALUES. 

AS A RESPONSIBLE 

CORPORATE CITIZEN, 

SAB GIVES APPROPRIATE 

CONSIDERATION TO 

ETHICAL, SOCIAL 

AND HEALTH, SAFETY 

AND ENVIRONMENTAL 

IMPACTS. 

PAGE ELEVEN 


Building 

the Bonds... 

Our People 

• E MPLOYEES 

• B RAND 

• I NDUSTRY 

• S UPPLIERS 

C ONSUMERS 

C USTOMERS 

SAB recognises that its commercial success depends on the full commitment of – and loyalty to – all employees, 

customers, consumers and suppliers. 

EMPLOYEE BALANCE SHEET 

The loyalty and dedication of our people have been key factors in the 

prosperity of SAB since 1895. During the 1998/99 year under review, 

SAB had some 49,000 people working in 19 countries around 

the world. Of this total, 59 per cent have been with the Group 

for five years or more. During the review period, these people 

BOBBY MALABIE IS THE NEW 

DISTRICT WEST DISTRICT MANAGER 

AT BEER SOUTH AFRICA AND 

RECENTLY ATTENDED A MARKETING 

MANAGEMENT COURSE AT HARVARD 

UNIVERSITY AS PART OF SAB’S KEY 

MANAGERS’ DEVELOPMENT 

PROGRAMME. 

received 33 per cent of the wealth created by the Group as direct remuneration and, since 

the inception of the Employee Share Plan in 1998, some 680 employees have exercised the 

option to participate in this scheme. Over the past seven years, the price of SAB shares has recorded a compound 

growth rate of 15.1 per cent on the Johannesburg Stock Exchange and members of the share plan enjoy the benefit 

of a superior track record. 

PAGE TWELVE

REMUNERATION POLICY 

SAB evaluates jobs at all levels and pays competitive remuneration rates for agreed tasks. These are benchmarked 

against the respective markets. Employees receive various retirement, accident, medical, death and welfare 

benefits, including support for housing, education and 

training. In South Africa, SAB’s wages remain at the top 

end of the market. In Poland, for example, they are 

approximately double the national standard. Throughout 

the Group, employees are encouraged to add value by 

• SALARY AND BENEFITS ▪ SAB REMUNERATES ITS 

EMPLOYEES FAIRLY, ACCORDING TO SKILLS AND PERFORMANCE, BY 

REFERENCE TO COMPETITIVE INDUSTRY AND COUNTRY CONDITIONS 

AND WITHIN A REWARDING WORK ENVIRONMENT. 

meeting agreed targets in productivity enhancement, cost savings and other specific objectives. 

Nile Breweries, in Uganda, has made an important contribution to the quality of life of its workforce. In 1992 and 

prior to SAB’s acquisition in 1997, the workforce was around 400 and the average wage NUsh40,000 per month (US$39). 

Now over 700 people are employed, and the average monthly wage has quadrupled to NUsh170,000 (US$122). 

LABOUR 

Labour relations in the Group were stable during the past year, with divisions reporting minimal disruption and 

successful negotiations. 

In Poland, significant restructuring of 

the Lech and Tyskie breweries – forming one 

brewing group, Kompania Piwowarska – 

resulted in some retrenchment, which was 

necessary in the short term to ensure future 

• PARTICIPATION AND COMMUNICATION ▪ SAB IS COMMITTED TO TIMELY, 

HONEST AND RESPECTFUL COMMUNICATION AND TO FREEDOM OF EXPRESSION. SAB 

RECOGNISES THE RIGHT TO FREEDOM OF ASSOCIATION OF EMPLOYEES AND FURTHER 

RECOGNISES THAT TRADE UNIONS AND COLLECTIVE BARGAINING FORM A NORMAL 

PART OF LABOUR/MANAGEMENT RELATIONS. EMPLOYEE PARTICIPATION IN PROBLEM- 

SOLVING AND DECISION-MAKING IS ENCOURAGED. 

SAB EMPLOYEES ON OUR 

PRODUCTION LINES AT 

NILE BREWERY IN UGANDA 

AND AT LECH BREWERY 

IN POLAND. 

growth. Negotiations were successfully resolved according 

to a social contract between the state, SAB and its partners, 

and the trade unions. Further positions were, however, created 

in other divisions, which resulted in a minimum number of 

jobs lost. 

PAGE THIRTEEN 


Building the Bonds 

(CONTINUED) 

DEVELOPING OUR PEOPLE 

SAB seeks to create the environment for all individuals and teams to develop their full potential for the benefit of 

themselves and the Group. 

Employee benefits 

In the past year, over 34,000 employees in the SAB Group took advantage of education and training opportunities 

offered by the Company, an investment in skills enhancement of some US$17 million (R97 million). The primary 

focus remained on upgrading management and technical 

skills, although the number of employees enrolling for adult 

basic education and training and life-skills courses increased 

significantly. 

• EMPLOYEE DEVELOPMENT ▪ SAB SEEKS TO CREATE 

AN ENVIRONMENT IN WHICH ALL INDIVIDUALS AND TEAMS MAY 

DEVELOP THEIR FULL POTENTIAL FOR THE BENEFIT OF 

THEMSELVES AND THE GROUP. 

Beer South Africa consolidated its “corporate university” 

approach to education, offering qualifying employees the best available opportunities at home and abroad. During the 

year, 36 in-house bursars progressed with studies for degrees at various universities. 

The Heriot-Watt University postgraduate course in brewing and malting 

entered its second year with seven employees. Ten employees are enrolled for 

the MSc at Brunel University’s postgraduate course in advanced packaging. 

Customised economic value added (EVA) and sales and distribution training 

programmes were run in conjunction with Insead 

University of Fontainebleau. 

TSOGO SUN ESTABLISHED 

A DEDICATED CASINO 

TRAINING SCHOOL, WHERE SKILLS AND DEVELOPMENT TRAINING ARE 

PROVIDED FOR EMPLOYEES. 

Each year, some eight executives are given the opportunity to attend an executive development 

programme at leading international business schools. 

During the year under review, Beer South Africa sent 1,991 delegates on 133 formal education programmes, and 

19 delegates were enrolled in the Natal Technikon’s diploma in packaging management. Over 4,800 delegates received 

technical training, and 970 delegates are enrolled for adult basic education training. 

PAGE FOURTEEN

Training Institute 

During the year, 2,639 delegates attended 187 formal courses at Beer South Africa’s Training Institute. In total, the institute 

trained 6,170 delegates over 11,500 training days, covering 380 workshops or courses. Technology upgrades during the 

year amounting to US$700,000 (R4.2 million) will reinforce video conferencing and technical training workshops. 

The Training Institute has been appointed to the judging panel of the International Benchmark Forum, the 

world’s foremost judge of world-class training practices. 

Beer South Africa has designed and implemented a competency acquisition process (CAP), in line with the 

SA Quality Assurance Act, 1995 and Skills Development Bill, 1998. Australian accreditors, from the University of 

Technology in Sydney, rated 45 people to develop competency standards, 58 to develop workplace assessment 

documents, 373 as workplace assessors and 18 trainers as master trainers. 

Specialised training is a priority and Beer South Africa successfully established a Sales Academy at the Training 

Institute. Representatives now receive three weeks’ intensive training, preparing them for challenges in the 

marketplace and giving them the skills to deliver world-class service. 

The company’s intranet – BEERNet – includes a comprehensive human resource development course catalogue, 

highlighting the 132 training programmes offered. 

In addition, a learning resource guide on the intranet 

contains over 800 items, ranging from internal and external 

courses, key magazines, journals, reports and books, 

websites, videos, seminars and conferences. These initiatives 

make self-development far more accessible to employees. 

SKILLS DEVELOPMENT 

PROGRAMMES ACROSS THE 

GROUP ENABLE EMPLOYEES 

TO IMPROVE THEIR CAREER 

OPPORTUNITIES. 

Beer South Africa participates in the annual American Society for 

Training and Development’s Benchmarking Forum survey. The forum is limited to some 50 international companies, 

whose training function meets its criteria for functional excellence. Beer South Africa’s figures and training spend of 

4.6 per cent of payroll compare very favourably with top international companies’ training statistics as reflected in the 

survey findings. 

PAGE FIFTEEN 



(CONTINUED) 

Southern Sun currently has 14 per cent of the hospitality industry’s payroll and does 25 per cent of the 

industry’s training – well above the 15 per cent of the next best competitor. In the past year, the company achieved 

over 500 national qualifications for its staff, almost a quarter of all qualifications achieved in the industry. Over the 

last three years, the company’s spend on training has ranged between 5.1 per cent and 6.8 per cent of its payroll. 

Importantly, in the South African environment, 83 per cent of its training budget was spent on people of colour, and 

44 per cent on females. Tsogo Sun has an equally impressive record. In its three operating casinos, an average of 

43 per cent of its current employees were previously unemployed or had never worked before. Training was intensive 

and constructive, with numerous training sites accommodating up to 600 people at any time. The total training time to 

start the commercial operations was over 15,000 working days. 

In addition, over the last six years, Southern Sun has made available some US$2.3 million (R14 million) for 

housing and family education, extending the reach of the group’s employee benefits. 

Project Noah 

Project Noah, a trailblazing initiative launched by Beer South Africa and the Food and Allied Workers’ Union in 1997, 

continues to play a leading role in developing sustainable 

business alternatives for employees, whose jobs have 

been modified or who have been retrenched. Examples of 

businesses started under the Project Noah banner include 

panel beating, fast food take-away, micro loans, crate 

washing, printing and transport. 

SOUTHERN SUN EMPLOYEES RECEIVED NATIONAL QUALIFICATION 

CERTIFICATES IN APRIL 1999 FOR ACHIEVEMENT IN HOSPITALITY 

TRAINING PROGRAMMES. 

PRESIDENT THABO MBEKI OPENED THE GCUWA TRAINING CENTRE, 

ESTABLISHED BY PROJECT NOAH IN CONJUNCTION WITH THE PRESIDENTIAL 

PROJECT TEAM, THE DEPARTMENT OF LABOUR AND THE EASTERN CAPE 

DEVELOPMENT AGENCY IN THE EASTERN CAPE LAST YEAR. 

The Gcuwa Training Centre at Butterworth, Eastern Cape, 

was opened in 1998. By March 1999, some 335 people had received hands-on training at this thriving centre. Other 

significant initiatives included the launch of the Welkom-based (Free State) beer distributor – Kopanelo Transport 

Company – and the inception of the Isando-based (Gauteng) small business “incubator”. 

PAGE SIXTEEN

GROUP INITIATIVES 

In South Africa, all divisions focus on the advancement of black and female persons in managerial positions, and 

encourage dealings with black-owned businesses. With full management commitment, progress is measured across the 

Group against stated qualitative and quantitative targets. 

During the 1998 financial year, the proportion of 

black executives in Beer South Africa rose to 22 per cent, 

and black senior managers to 35 per cent. The Equity III 

programme launched in the previous financial year made 

• DIVERSITY ▪ SAB COMPANIES UNDERSTAND AND RESPECT THE 

WIDE RANGE OF HUMAN DIVERSITY IN WHICH THEY OPERATE 

AND ENCOURAGE INCLUSIVENESS WITH REGARD TO HUMAN 

RESOURCE PRACTICES, IRRESPECTIVE OF NATIONALITY, RACE, 

GENDER AND PHYSICAL DISABILITIES. 

good progress in creating an environment in which 

employees learn to make the most of people’s diversity and, in so doing, compete more effectively. 

At ABI, progress was made in achieving equity targets. However, greater focus is needed in this area in the future 

and the business is currently reviewing its equity strategy. 

In Hungary, where fierce competition and a declining beer market resulted in some retrenchments, employees 

received life skills training and equitable retrenchment packages, while further positions are created in other divisions, 

which minimises the total number of jobs lost. 

At Southern Sun, people of colour account for 34 per cent of management, 70 per cent of supervisory staff, 

93 per cent of skilled staff and 100 per cent of general staff. In terms of new legislation in South Africa – the Employment 

Equity Act – Southern Sun was the first company in 

any industry to lodge its employment equity plan 

with the Department of Labour on 31 March 1999. 

BLACK EMPLOYEES – 

BEER SOUTH AFRICA 

(ACTUAL AND TARGETS) 

F98 

Percent 

40 

F99 

ACTUAL 

F99 

TARGET 

35 

30 

25 

20 

GEORGE N’GAN’GA, QUALITY CONTROL TECHNICIAN 

AT CASTLE BREWING IN KENYA. 

15 

10 

In 1998, Southern Sun made a significant contribution to job creation, primarily 

5 

through the activities of Tsogo Sun, which was awarded three casino licences during the 

0 

Executives 

Senior 

management 

year. As a stated policy, Tsogo Sun has allocated 30 per cent of all jobs created to the 

unemployed, and reserved a minimum of 60 per cent for historically disadvantaged people. 

PAGE SEVENTEEN 



(CONTINUED) 

OCCUPATIONAL SAFETY 

Productivity is directly related to the health and safety and welfare of employees. SAB companies promote continual 

improvement in health and safety performance, involve employees and their representatives, and audit compliance 

with health and safety legislation and industry safety standards. 

Our Training Institute retained its five-star National Occupational Safety Association (NOSA) status, with a 

grading of 98.8 per cent, believed to be a record for an operation of this size. It achieved the five-star rating at its first 

attempt last year with a score of 90.5 per cent. The grading 

reflects an uncompromising attitude towards safety, good 

• HEALTH AND SAFETY ▪ SAB RECOGNISES THAT 

housekeeping and environmental issues. 

PRODUCTIVITY IS DIRECTLY RELATED TO THE HEALTH, SAFETY 

AND WELFARE OF ITS EMPLOYEES. SAB COMPANIES PROMOTE 

At March 1999, Beer South Africa had five NOSCAR sites 

CONTINUAL IMPROVEMENT IN HEALTH AND SAFETY PERFORMANCE, 

(the highest award that can be achieved by a site under the 

THROUGH THE INVOLVEMENT OF EMPLOYEES AND THE AUDITING 

NOSA safety, health and environment grading system), as 

OF COMPLIANCE WITH HEALTH AND SAFETY LEGISLATION AND 

well as 32 five-star graded sites and five four-star sites 

INDUSTRY SAFETY STANDARDS. 

compared with 19 and seven in 1998 respectively. 

During the year, Zambian Breweries secured the first NOSA rating in 

that country, following an internationally rated audit of the state of the 

company’s safety, health and environmental protection. 

Appletiser is ISO 9002 accredited and its operations have a five-star rating 

from NOSA, reviewed annually and incorporating stringent preventative 

health and safety measures. A requirement of the NOSA rating is a 

disabling injury frequency rate of less than one per cent, 

which Appletiser 

has met each month since August 1998. The company 

was the recent recipient of the 1999 NOSA Most 

APPLETISER’S 5-STAR NOSA RATING. 

Improved Company award in the field of health, safety and 

environment, and its health and safety officer was nominated as the most improved safety 

practitioner of the year. 

During the year, Prospecton became the first Beer South Africa brewery to achieve ISO 9002 certification. 

This international conformance standard reviews the entire quality system, ensuring satisfactory products and 

services. The review was conducted by the South African Bureau of Standards (SABS), which noted at the time, that 

“Prospecton has joined an elite club. Beer South Africa wants to be the best and this award proves you understand 

quality, that you are a quality company.” 

PAGE EIGHTEEN

Healthcare facilities 

Occupational health and safety clinics are provided at all major sites for the primary and emergency care of staff. 

In addition to these basic services, health education programmes covering life-threatening diseases are offered. 

In this regard, ABI have identified AIDS, TB and cancer as their major areas of concern. 

In Kenya, medical aid is not a state requirement for employers. Employees at Castle Brewing Kenya received 

a welcome benefit when the company instituted a self-funded medical aid with a corporate contribution of 

40,000 Kenyan shillings (US$733) per annum. This was the first scheme of its kind in Kenya. The company also 

has a first-aid centre on site, staffed by an occupational health nurse. 

SAB GROUP SPORTS AND RECREATION 

The SAB Group Soccer League in South Africa turned 21 in 1998, continuing its tradition of being run by employees 

for employees, building on a common passion for the game among various Group companies. The league is a strong 

unifying factor, and participants compete against colleagues across the country. More importantly, the league is an 

important development tool for referees, administrators and coaches. Some 20 referees, trained in the SAB league, 

now serve in the national premier soccer league and the National Soccer League (NSL) first division. 

Two national tournaments are the highlights of the fixtures calendar, and winners receive trophies and prizes 

totalling some US$8,500 (R50,000). In 1998, the budget for the soccer league was over US$172,000 (R1 million), 

covering administrative and training costs, travel allowances and soccer kits for all teams. 

Monthly and annual recognition of achievements and company-sponsored fun days such as indoor cricket and 

team-building exercises on the Bree River, keep Appletiser staff motivated and enthusiastic. 

Internal Communication 

Reports to employees, in line with world standards, are published by major subsidiaries and divisions. SAB employee 

publications won several major awards in the review period. Three publications 

received awards from the prestigious International Association of Business 

AS PART OF THEIR INTERNAL 

COMMUNICATIONS PROGRAMME, 

DREHER BREWERIES HAS 

INSTALLED EMPLOYEE 

COMMUNICATION BOXES 

THROUGHOUT THE SITE. 

Communicators, while the Beer South Africa’s annual report to employees was judged best employee report in the 

national competition of the South African Institute of Chartered Accountants. 

Groupwide, most of our companies have internal communication media such as intranet systems and regular 

newsletters and magazines. These publications are used to communicate local events, operational data, strategic 

developments and notices to employees. 

In addition, some of our sites – such as Dreher Breweries – have suggestion boxes which enable employees to 

communicate ideas and complaints to management. 

PAGE NINETEEN 



(CONTINUED) 

Customers 

BUILDING RELATIONSHIPS 

SAB provides branded products and services of consistent and uncompromising quality and value, to meet the needs 

and standards of our consumers and industry customers worldwide. 

As an international brewer, SAB prizes its relationships with customers, knowing that the Company’s success is 

based on identifying and meeting their needs more efficiently than its competitors. Customer service is enhanced by 

infrastructural support in the form of merchandising and credit facilities, and alternative bulk distribution facilities. 

Across the Group, initiatives are in place for further improvements in levels of customer service. In South Africa, 

the overall service rating in our beer operations has improved from 71.6 per cent to 74 per cent. Fifty-eight per cent 

of Beer South Africa’s 12,000 customers rated the division as their best supplier, up sharply from 51 per cent the previous 

year (the number of customers who rated SAB as their worst supplier rose slightly from 5 per cent to 6 per cent). 

In Zambia, Mosi Lager retained its status as the country’s preferred beer and the launch of the 340 ml cans has been 

well received, with demand exceeding expectations. To extend availability, Zambian Breweries created new distribution 

channels and opened a depot in Livingstone. In February 1999, the company acquired Northern Breweries plc, located 

in the Copperbelt city of Ndola. Being the only other brewery of significance in Zambia, this acquisition strengthens 

the company’s ability to effect further distribution synergies and to benefit from the eventual economic upturn. 

Nile Breweries completed an expansion programme during the year to increase capacity from 180,000 crates per 

annum to 500,000 crates or 720,000 hectolitres. The programme centred around increasing brewing, storage and 

fermenting capacity at a cost of over US$14 million (R82 million). 

In Poland, the Lech and Tyskie breweries were merged to form a national operation, Kompania Piwowarska, 

AS AN INTERNATIONAL BREWER, SAB 

PRIZES ITS RELATIONSHIPS WITH ALL 

OF ITS CUSTOMERS. 

THE CASTLE BREWERY IN KENYA 

MAINTAINS CLOSE RELATIONS 

WITH ITS DISTRIBUTORS. 

in which SAB International holds an effective 67 per cent. The new entity, with 

a unified management structure and integrated sales and distribution systems, is well 

placed to expand its reach more rapidly, provide quality customer service and 

maximise cost synergies. A sophisticated telecommunications call centre, Infoline, for 

customers and consumers was recently introduced and has been well utilised. 

PAGE TWENTY

Small-drop deliveries play an important role in the distribution cycle. A pilot project being undertaken by Beer 

South Africa is testing Hackney trucks for this purpose. These three-seater Mercedes-Benz diesel trucks can handle 

eight pallets (1,360 cases). As most small-drop customers only need between 30 to 40 cases, the Hackneys can make 

several deliveries per trip. The truck’s design makes loading and offloading more efficient and less time consuming. 

TRAINING 

Customer liaison 

In South Africa – where the informal market continues to grow – Beer South Africa sales representatives now have 

sophisticated hand-held computers, which provide important management information for owners of small outlets. 

Southern Sun spent over US$170,000 (R1 million) on five 

different customer service programmes. In addition to ongoing guest 

satisfaction surveys, Southern Sun has invested in a number of 

• INNOVATION ▪ SAB AIMS FOR CONTINUOUS 

research initiatives to establish satisfaction levels, market positioning 

IMPROVEMENT AT ALL LEVELS IN THE GROUP BY 

and usage and attitude studies. In an innovative step, Southern Sun 

ENCOURAGING EMPLOYEES TO BE CREATIVE, INNOVATIVE 

put its commitment to service in the spotlight by placing cards in 

AND OPEN TO NEW IDEAS. 

each of 12,600 rooms advising guests that if they were dissatisfied, 

they could contact a Southern Sun executive director immediately by 

telephone (directors rotate the duty). This ensures that guests have 

instant access to top management, while management is kept 

informed of any issues that need to be addressed at individual hotels. 

Southern Sun’s attention to the quality of its hotels and services 

is reflected in a number of global awards received during the year. 

The Bass Hotels & Resorts Worldwide Quality Excellence Award, 

IN ITS COMMITMENT TO SERVICE EXCELLENCE, 

SOUTHERN SUN PROVIDES THEIR GUESTS 

WITH TELEPHONE ACCESS TO TOP 

EXECUTIVE MANAGEMENT. 

BEER SOUTH AFRICA IMPLEMENTED THE USE OF 

HAND-HELD COMPUTERS THAT ENABLE DRIVERS 

TO INVOICE CUSTOMERS ON SITE. 

which evaluates all aspects of operations, premises and 

customer service, was given to Holiday Inn Johannesburg 

International Airport, Holiday Inn Garden Court Wilderness and Holiday Inn Garden Court Sandton City. The airport 

hotel also received a Modernisation Award following its US$4.3 million (R25 million) upgrade. Southern Sun received 

an award for outstanding service from the Association of South African Travel Agents for the ninth consecutive year. 

PAGE TWENTY-ONE 



(CONTINUED) 

Consumers 

SAB is committed to providing products of uncompromising quality to meet the needs of our brand consumers worldwide. 

At the same time, the Company believes its products should be advertised and promoted in an honest and 

ethical manner, that respects the values of our consumers’ 

societies. 

• VALUE, PRICE AND QUALITY ▪ SAB PROVIDES BRANDS 

In our beer operations in South Africa, trade quality 

AND SERVICES OF CONSISTENT AND UNCOMPROMISING QUALITY AND 

assessments are done on a regular monthly basis. 

VALUE, TO MEET THE NEEDS AND STANDARDS OF OUR CONSUMERS 

AND INDUSTRY CUSTOMERS WORLDWIDE. 

The assessment looks at the beer’s outer packaging 

(the bottles, trays and multipacks), the container (the volume 

to which it has been filled, the opening, labels and appearance), the appearance of the beer itself (colour, foam clarity, 

etc.) and its drinkability (taste, smell and carbonation). Each of these is weighted according to importance; drinkability 

40 per cent, product appearance 30 per cent, container 20 per cent, and outer packaging 10 per cent. 

The measured scores topped Beer South Africa’s target of 70 per cent every month against every test. Product 

appearance scored above 95 per cent every month, containers were 90 per cent or more in all but two months, and 

drinkability consistently scored around 90 per cent. The overall consumer rating was slightly more than 90 per cent. 

VALUE FOR MONEY 

Innovation 

In line with top-end evolving consumer needs for healthy moderation, 

Dakota Ice Beer was launched in October 1998. This is the first ice 

FROM END 2000 WHEN 

RENOVATIONS HAVE 

BEEN COMPLETED, 

VISITORS TO GAUTENG MAY ENJOY THE CONVENIENCE OF A LUXURY 

SOUTHERN SUN HOTEL AT THE JOHANNESBURG INTERNATIONAL AIRPORT. 

beer 

in South Africa, using the ice filtration process to produce a smoother, easy-drinking alternative for consumers. The 

brand’s alcohol content of just 2.8 per cent makes it ideal when a full-strength beer may not be the beer of choice. 

Launched with a major supporting promotional and advertising campaign, the brand has received a very positive 

PAGE TWENTY-TWO

esponse from the market. 

Beer South Africa launched a small-scale development brewery, the US$2.7 million (R16 million) Fransen Street 

Brewery, dedicated to developing and testing potential new products and brewing processes. Three trial beers – the 

alcoholic Ginger Beer, Winter Ale and Wheat Beer – were launched during August 1998 into 28 outlets in the regions of 

Isando and Chamdor. Seasonally, the Winter Ale was replaced with an India Pale Ale in November. The objectives of 

the brewery were to broaden the beer drinking experience for consumers, to educate and build up a stronger beer 

culture and to explore the potential for new, alternate beers produced by Beer South Africa. 

The overall consumer response to the concept was extremely positive, as it was seen to offer beer drinkers a greater 

choice of beers. The majority of consumers reported that the beers were “good value for money”. However, the test 

market highlighted the fact that managing small-scale brewing and distribution within the current infrastructure takes a 

lot of resource away from other areas of focus for the business. Slow sales, logistics and operational issues have led to 

the decision to review the manner in which Beer South Africa markets Fransen Street Brewery. Taps in the participating 

outlets will be taken out in consultation with the outlets, with immediate effect, leaving Fransen Street Brewery in full 

operation for research and new product development, as well as forming the nucleus for brewery tours at Chamdor. 

At Kompania Piwowarska in Poland, a two-year project, was recently completed to change the packaging and the 

crates for the breweries. 

Both the new bottles and the new crates used for the product range, including Lech, Tyskie and “10,5” 

are fully returnable. The crates are durable and resistant to extreme weather conditions such as temperature 

and humidity, as well as damage incurred from everyday use. During the selection, development and 

manufacture of the new crates, extensive quality control measures were introduced. 

The new crates were supplied by two Polish companies and carry a ten-year guarantee. The size of 

the new crate offers a further advantage, which allows for 50 instead of 45 crates to be loaded per pallet. 

BEER SOUTH 

AFRICA’S FRANSEN 

STREET BREWERY 

DEVELOPS AND TESTS 

NEW PRODUCTS 

AND BREWING 

PROCESSES. 

NEW CRATES 

AND BOTTLES WERE SUCCESSFULLY 

INTRODUCED BY KOMPANIA PIWOWARSKA IN POLAND. 

This has resulted in increasing distribution effectiveness by 10 per cent. 

The beer bottle was changed from the old “Euro” style to a slim, modern bottle with a long neck and a larger area 

for labels. The bottle weighs 10 per cent less than before and is 20 per cent more resistant to internal pressure, thus 

making it safer. Record sales and significant increase in market share have proved the new bottle and labels to be well 

accepted by consumers. 

PAGE TWENTY-THREE 



(CONTINUED) 

QUALITY ASSURANCE 

During the review period, Beer South Africa spent over US$950,000 (R5.6 million) on brewing research and 

development. The focal areas were flavour stability, fermentation, malt quality and new product development. 

The division’s scientists have developed novel technology 

to improve the quality of beer further, particularly in 

• PRODUCT SAFETY ▪ SAB IS COMMITTED TO PROVIDING 

terms of flavour stability. Research has been undertaken 

PRODUCTS WHICH ARE SAFE FOR THEIR INTENDED USE. 

in Beer South Africa’s laboratories to measure the vitality 

of yeast, and papers on the subject have been delivered at major international brewing conventions. 

A constant focus on brewing standards and consistent production has resulted in Beer South Africa’s products 

winning many international accolades, including the 

• COMPETITION ▪ SAB BELIEVES IN FREE MARKET 

Grand Champion award for the second time at the 

COMPETITION AND GROUP EMPLOYEES MAY NOT COMMENT 

Australian International Beer Tasting Competition, and 

UNFAVOURABLY ON THE PRODUCTS, MANAGEMENT OR OPERATIONS 

gold medals at the prestigious Burton-on-Trent Beer 

OF COMPETITORS. GROUP COMPANIES WILL NOT SEEK TO PREVENT 

OTHERS FROM COMPETING FREELY WITH THEM, WITHIN THE 

Tasting Competition in the United Kingdom. Castle Lager 

FRAMEWORK OF APPLICABLE COMPETITION LAWS. 

is the 13th biggest-selling beer brand in the world with over 

15 million hectolitres sold last year. 

RANGE 

Beer South Africa’s brands continue to gain market share. In both the off- and 

on-premise markets, Beer South Africa has six brands in the top-selling 

eight alcohol products. 

SKILLED TECHNICIANS IN MODERN LABORATORIES 

ENSURE QUALITY CONTROL OF OUR PRODUCTS. 

THREE OF DREHER 

BREWERY’S PRODUCTS 

WON GOLD AND SILVER 

MEDALS AT THE MONDE 

SELECTION. 

In the highly competitive UK market, volume targets for Castle for the year were exceeded, capitalising on major 

sporting events including the ’99 Cricket World Cup. 

During the year, SAB successfully entered the Kenyan market, with a greenfield brewery constructed at Thika. 

Brands such as Castle Lager, Ranger, Hansa Pilsener and Castle Milk Stout were well accepted. 

Appletiser is a unique product. It was developed in South Africa in the 1960s as a constructive way to use apples 

considered unsuitable for “the table” market, but otherwise perfectly good. The product was such a success that, within 

PAGE TWENTY-FOUR

two years, it was being widely exported and subsequently produced in the UK. Using apple juice as a base, the 

company went on to develop other juices, launching Apple Mist in 1972, LiquiFruit in 1975, Grapetiser in 1981 and the 

hugely popular Just Juice in 1988. The importance of the Appletiser enterprise cannot be overestimated, as it provides 

local apple growers with a firm market in good years and bad, and eliminates much of the danger of over-production. 

Today, some 120,000 tons of apples a year are used in the South African pure fruit juice industry. 

During the year, Southern Sun introduced “Stayforless Stan” price-break specials. These highly competitive 

packages are aimed at cash-strapped South Africans, and cover the spectrum of the Group’s portfolio of hotels. 

The packages are enhanced with special airfare and car hire options from all major centres. In many instances, 

children under 12 years fly, eat and stay free. 

Suppliers 

BUILDING CAPACITY 

As a major player in many communities around the world, SAB is closely involved in creating jobs through 

establishing new and sustainable businesses. 

Beer South Africa’s formal commercial equity 

programmes place an ever-increasing proportion of 

company business with organisations of all sizes, owned 

• SUPPLIES AND SERVICES ▪ SAB ALWAYS ENDEAVOURS TO 

MEET ITS LEGAL AND CONTRACTUAL OBLIGATIONS TO SUPPLIERS 

INCLUDING THE TIMEOUS SETTLEMENT OF ACCOUNTS. WE SEEK 

TO WORK TOGETHER TO ACHIEVE THE HIGHEST STANDARDS IN 

MATERIALS AND SERVICES SUPPLIED. 

OUTSOURCING 

TO CONTRACT 

WORKERS 

SUSTAINS 

EMPLOYMENT 

RANGING FROM 

OWNER-DRIVERS 

TO SEASONAL 

FRUIT 

PICKERS. 

and controlled by people from historically disadvantaged 

backgrounds. The Group’s policy is generating real empowerment through wealth creation. 

SAB is committed to fair terms of trade with all suppliers, including adhering strictly to contracted payment 

terms and always considering the well-being of our smaller suppliers. At 31 March 1999, the amount owed to trade 

creditors was equivalent to 57 days of purchases from suppliers. 

PAGE TWENTY-FIVE 



(CONTINUED) 

COMMERCIAL EQUITY 

Beer South Africa now has over 2,200 active commercial equity suppliers, worth over US$55 million (R323 million). 

Commercial equity suppliers account for 13 per cent of the total number, providing 10 per cent of total supplier costs. 

Beer South Africa’s tender for its travel business – which 

stipulated that the company be at least 50 per cent black 

• DIVERSITY ▪ SAB ENCOURAGES DIVERSITY WITHIN ALL 

THE GROUP’S COMMERCIAL ASSOCIATIONS, PARTICULARLY THE 

managed and owned – was won by Seekers-Lesedi Travel. 

INVOLVEMENT OF THOSE PREVIOUSLY DISADVANTAGED, 

Managing director, David Malakalaka, has a solid background 

MINORITIES AND LOCAL BUSINESSES AROUND THE WORLD. 

in travel and his partnership with one of the leading South 

African travel agencies is off to a good start. Seekers-Lesedi operates in-house from Beer South Africa’s head office, 

and employs seven consultants. 

Thuthuka Packaging is an example of the benefits of combining skills and making commercial equity a lucrative 

reality. With active support from Beer South Africa, this packaging company has successfully tendered for the contract 

to print some one billion labels for the company during the current year, meeting the high-quality workmanship 

demanded by the division. This initial success has led to contracts from other SAB African operations, including those 

in Tanzania, Mozambique and Zambia. 

Beer South Africa has conducted extensive trials in the Caledon region to increase the variety of barley crops 

and supply base, and reduce dependence on imports. Initial trial farming has led to established commercial farming 

activities for tribal farmers in the region, generating much-needed cash flow and, more importantly, jobs in a poor 

area. The value of farm produce from these lands exceeded US$370,000 (R2.2 million) in the review period. 

The farmers receive ongoing technical and training support from extension officers 

to ensure the sustainability of the project. 

SEEKERS-LESEDI TRAVEL WON THE 

COMMERCIAL EQUITY BARLEY FARMING. 

TENDER FOR BEER SOUTH AFRICA’S 

TRAVEL BUSINESS. 

In Poland, annual supplier agreements contribute to keeping quality standards in place and controlling costs. 

Local sources are given preference, providing they meet quality levels. The breweries have an active policy of adding 

value to supplier relationships by transferring skills and knowledge, and involving suppliers in new product design. 

The yeast beneficiation project in South Africa is based on recovering excess yeast formed during the brew 

fermentation process, drying it and exporting the powder extract to the international market. Previously, excess yeast 

PAGE TWENTY-SIX

was dumped as waste or inefficiently dried and sold. After Beer South Africa conducted feasibility tests, the process 

was outsourced. Joint ventures were established with the necessary contacts and expertise for exporting end products, 

generating valuable foreign exchange for South Africa. Similar joint ventures were established in the spent grains 

beneficiation project, and results to date are most encouraging. 

ABI now has over 100 commercial equity suppliers, managing contracts worth over US$500,000 (R3 million) 

per annum. Appletiser’s two major commercial equity suppliers provide company transport for employees and 

courier services relating to stores and purchasing, at a total cost of US$200,000 (R1.2 million) each year. 

OUTSOURCING 

Beer South Africa has a strategic policy of outsourcing services such as distribution. Its pioneering owner-driver 

programme increased to 215 vehicles or 58 per cent of beer delivered during the year. Outsourcing to former 

employees is a key component of sustainable wealth creation, given its important multiplier effect. 

Southern Sun has 235 outsourcing projects, as well as 29 insourced private companies. Southern Sun is 

actively involved in building capacity with its suppliers, raising standards to the required level and sharing 

technical training on specific issues, such as Year 2000 compliance. It also uses organisations for the disabled as 

suppliers where possible, as reflected by awarding the contract for certain guest amenities to a paraplegic 

community in Soweto. In recent years, a number of successful joint ventures were formed with suppliers, in some 

cases leading to the establishment of a permanent new company. At 31 December 1998, Southern Sun had 

outsourced over 2,500 jobs. 

In Kenya, the core workforce numbers around 200, as many activities are outsourced. These range from 

cleaning and catering to distribution, and provide approximately 500 additional permanent jobs. Castle Brewing 

OUTSOURCING 

IN OUR 

BROADER 

AFRICAN 

OPERATIONS 

INCLUDES 

PRODUCT 

DISTRIBUTION 

AND CATERING. 

Kenya sources locally wherever possible, including labels, crowns and other raw materials. In many instances, 

this requires working closely with suppliers to achieve required specifications and quality. 

Nile Breweries, Uganda, outsources distribution, using its distributors as sales people in a market where 

informal outlets account for 85 per cent of the market. Nile assists its distributors in upgrading fleet operations, 

increasing storage capacity and certain business functions. 

PAGE TWENTY-SEVEN 


Building 

the Bridges... 

• C OMMUNITIES 

• E NVIRONMENT: 

PRESENT AND FUTURE GENERATIONS 

Communities 

The broader community affords SAB its licence to trade. Through relationships based on trust and mutual 

advantage, the Group conducts a range of active social investment partnerships, which include non-governmental 

organisations, state departments and community groups capable of 

sustainable development. Through individual project evaluations, 

far greater emphasis is now being placed on the impact of our 

social investment programmes, which amounted to US$13 million 

(R77 million) during the review period. The effectiveness of 

• CONTRIBUTIONS ▪ SAB SEEKS TO BE ACTIVELY 

INVOLVED IN PARTNERSHIPS, WHICH BRING 

MEASURABLE BENEFITS TO PEOPLE IN COMMUNITIES 

WHERE WE OPERATE, WHILE ALSO HELPING US 

TO ACHIEVE OUR LONG-TERM BUSINESS GOALS. 

IN PARTICULAR, SAB COMPANIES WILL SUPPORT 

THE DEVELOPMENT AND PROTECTION OF CIVIL 

SOCIETIES AND ORGANISATIONS, WHICH PROMOTE 

ENVIRONMENTAL AWARENESS AND PROTECTION. 

SAB’s social investment spend in South Africa is regularly confirmed by its 

ranking among the top three caring companies as monitored by independent market surveys. 

As a major role player in its communities, the Company supports a broad range of development activities in the 

fields of education, health, welfare, arts and culture and environmental conservation. In addition, SAB is closely involved 

in creating jobs through its support for the establishment and maintenance of small, medium and micro enterprises. 

PAGE TWENTY-EIGHT

KICK START 

The Kick Start programme, which encourages the spirit of entrepreneurship among hundreds of youths from 

disadvantaged communities, has spent US$1.7 million (R10 million) since its inception in 1996 in providing capital for 

young black South Africans to start their own businesses. Kick Start has also established strategic alliances with local 

universities, technical colleges, schools and other institutions to enhance the educational and developmental value of 

the initiative. 

TOWNSHIP AIDS PROJECT (TAP) 

For the past two years, SAB has supported TAP’S HIV/AIDS awareness and education programmes that target schools 

in and around Soweto. TAP also provides counselling for diagnosed people and their families. In 1999, the project will 

introduce a schools competition to increase awareness of the disease among primary and secondary learners, and to 

generate income for its self-sustenance programme. 

ALEXANDRA COMMUNITY POLICING FORUM 

SAB’s commitment to eradicating crime in South Africa was reflected during the year when the Group donated a fifth 

vehicle to the Alexandra Crime Prevention Unit. SAB will also modify and upgrade the police station’s switchboard and 

send 20 South African 

Police Services (SAPS) 

personnel for 

advanced driver 

training. 

SAB’S SOCIAL INVESTMENT 

PROGRAMMES PROVIDE RESOURCES 

TO SUPPORT VARIOUS COMMUNITY 

PROJECTS RANGING FROM CRIME 

PREVENTION TO HEALTH 

EDUCATION AND ENTREPRENEURIAL 

TRAINING. 

WOMEN IN RURAL AREAS (WIRA) 

Women in rural areas are a severely disenfranchised group in South Africa. The WIRA programme, launched in 1996, 

has contributed significantly to turning impoverished villages into developing socio-economic entities. Working with 

provincial gender commissions, and the Centre for Cognitive Development at Vista University, Beer South Africa has 

PAGE TWENTY-NINE 


Building the Bridges 

(CONTINUED) 

helped over 1,200 women to complete programmes involving personal empowerment and the skills needed to develop 

income-generating projects. As many of these women are breadwinners, WIRA has improved the quality of life of 

some 4,500 people. 

WIRA projects include businesses such as bakeries, poultry farming, brickmaking and the manufacture of 

embroidered linen and mohair jerseys. 

• CONSULTATION ▪ SAB SEEKS TO ENHANCE ITS REPUTATION BY 

CLEAN AND GREEN 

This successful partnership between Beer South Africa and the 

Department of Public Works is inculcating an environmental 

ethic in communities and assisting local authorities to 

BEING A GOOD NEIGHBOUR IN LOCAL COMMUNITIES. WE WILL 

REGULARLY CONSULT PEOPLE AFFECTED BY OUR OPERATIONS, BOTH 

FORMALLY AND INFORMALLY, ESPECIALLY ON SOCIAL ISSUES AND 

ENVIRONMENTAL IMPACTS, AND GIVE WEIGHT TO THEIR VIEWS. 

implement and improve waste management systems. To date, Clean and Green has created over 600 jobs. 

Over 140,000 households in 50 communities, including formal townships, informal settlements and rural areas 

have benefited from a cleaner, healthier environment. 

OTHER COMPANY INITIATIVES 

ABI commits 1.5 per cent of after-tax profits to community support, 

an amount of over US$340,000 (R2 million) was invested in 1998. 

Focal areas include youth, rural development, arts and culture, health 

and welfare and environment. The company’s founding sponsorship 

of the United Schools Basketball League has encouraged much 

greater support for this fledgling sport in South Africa, enabling 

the construction of large basketball centres in predominantly 

APPLETISER’S DAY CARE CENTRE FOR CHILDREN. 

disadvantaged areas. Starting with just one school and one centre in 1995, the programme has grown significantly to over 

190 schools and 40 centres. ABI also supports national projects such as AIDS awareness and Business Against Crime. 

During the year, ABI and the Coca-Cola Company donated US$172,000 (R1 million) to the National Zoological 

Gardens to upgrade Pretoria Zoo’s recreational facilities in its centenary year. The zoo is an educational and leisure 

destination, helping children and the broader public to discover the rewards of interacting with wild animals. 

PAGE THIRTY

Appletiser has run the Sunnyside Dagsorg (day care) centre at its fruit farms in Grabouw, Western Cape since 

1983. The centre enables families to earn dual incomes while knowing their children receive care. The curriculum is 

geared for school readiness, from numeracy to gross and fine motor development, language development and many 

other life skills. The centre also offers after-care facilities for school-going children. Since inception, some 640 children 

have benefited from the Sunnyside centre. The company also sponsors three local schools, supporting the growth of 

education in the region. 

Southern Sun’s social focus includes the development of its own people, housing for staff, sports development, 

support for the country’s hotel schools and the Reach for a Dream child welfare project. 

An important criterion in the award of South African casino licences was community development. Tsogo Sun’s 

commitment in this respect underpinned its success in winning three licences in two provinces to date. Penryn 

School, a rural school in Mpumalanga that fills an extraordinary need in the region, will receive US$172,000 

(R1 million) from the company for development. 

In Kenya, the construction of the greenfield brewery at Thika was designed to maximise the benefit to 

the local community, including underground telephone ducting, an access road, an effluent pipeline and the 

rehabilitation of existing effluent treatment works. Total capital expenditure on these services was US$1,9 million 

(R11 million). 

Dreher Breweries supports the Junior Chamber Hungary’s “Outstanding Young Person” award in the 

environmental category. The programme honours 10 young individuals between the ages of 18 to 40 who managed, 

created or generated an outstanding achievement in the field of environment protection. This programme is playing 

a vital role in increasing public awareness for environmental values. 

NILE BREWERY HAS SUPPORTED 

THE JINJA COMMUNITY SPORTS CENTRE. 

As part of its corporate social investment 

programme, Nile Breweries has spent 

US$50,000 (R300,000) on refurbishing the Jinja community sports centre, which had become dilapidated 

after years of neglect. The centre now also boasts a public library, and is run by Nile staff for the benefit 

of the community. 

PAGE THIRTY-ONE 



(CONTINUED) 

CAUSE-RELATED MARKETING 

In Uganda, Nile Breweries continued to sponsor soccer development as part of its five-year commitment worth 

NUsh100 million (US$72,000), initiated in 1997 as the country’s first soccer sponsorship. Since then, other major 

sponsors have joined in, doubling the commitment. 

The SAB Centenary Centre in South Africa – an unusual and informative venue for various stakeholder 

functions and a showcase for beer and SAB – attracted 22,400 visitors during the year. These were down from the 

previous year’s figures and the Centre is now being extensively re-marketed, and is starting to be used as a themed 

convention centre. 

Stakeholder entertainment in the Western Cape is enhanced annually by Appletiser’s continued support 

for the Kirstenbosch Summer Sunset Concerts, a relaxing outdoor affair where members of the public come 

and enjoy a rich variety of music, including 

performances by the Cape Town Philharmonic 

Orchestra. Due to the substantial publicity, which 

Kirstenbosch Botanical Gardens and the concerts 

have received, Appletiser has renewed their 

sponsorship commitment for a further three years. 

• SOCIAL ASPECTS OF PRODUCTS AND SERVICES ▪ SAB 

ACKNOWLEDGES THAT ALCOHOL PRODUCTS AND GAMING SERVICES 

CAN BE ISSUES OF CONCERN FOR SOME PEOPLE IN COMMUNITIES 

AROUND THE WORLD. WE ENGAGE THESE CONCERNS BY EDUCATING 

CONSUMERS AND OTHERWISE SEEKING TO AVOID THE MISUSE OF 

OUR PRODUCTS AND SERVICES. 

NILE BREWERY 

CONTINUES TO 

SPONSOR SOCCER 

DEVELOPMENT 

IN UGANDA. 

KIRSTENBOSCH 

SUMMER SUNSET 

CONCERTS 

SUPPORTED BY 

APPLETISER. 

RESPONSIBLE GAMING 

Tsogo Sun has implemented stringent controls to ensure that casino facilities are not abused by under-age participants 

or those few patrons who have an excessive propensity to gamble. These include strict regulation of access to underage 

people, imposing a casino entry charge, strict credit control procedures, training casino staff to identify and assist 

PAGE THIRTY-TWO

patrons with problem-gambling tendencies, appropriate signage, professional assistance and co-operation with industry 

and regulatory bodies dealing with the phenomenon. Tsogo Sun also supports research and care programmes 

conducted by the National Gambling Board. 

RESPONSIBLE USE OF ALCOHOL 

As a socially-responsible corporate citizen, SAB places heavy emphasis on the sensible use of alcohol beverages 

by consumers. It is a goal supported by responsible advertising, marketing and promotion, close co-operation with the 

public health community, ongoing educational 

campaigns and research, and the promotion of a sound 

alcohol policy for SAB employees. Beer South Africa is a 

founder member and major sponsor of the Industry 

• ADVERTISING AND PROMOTIONS ▪ SAB ADVERTISES AND 

PROMOTES ITS PRODUCTS IN AN HONEST AND ETHICAL MANNER, 

WHICH RESPECTS THE VALUES OF OUR CONSUMERS’ SOCIETIES. 

Association for Responsible Alcohol Use (ARA). 

During 1998, Beer South Africa conducted an extensive drink/drive campaign, representing an investment of 

US$700,000 (R4.2 million), which included repeated use of the government’s Arrive Alive campaign logo. The division 

also donated over US$172,000 (R1 million) to 

the campaign to fund the cost of 

communicating the issue in all nine provinces 

in South Africa. Statistics for the 1998 holiday 

season (December) show that the number of 

road deaths declined by 10.9 per cent. 

In Poland, Kompania Piwowarska and Heineken have joined forces 

to promote a lobby group for responsible use of alcohol. They have drawn 

up a voluntary code of conduct for marketing beer, and each partner has 

contributed US$500,000 (R2.9 million) to the programme. 

PAGE THIRTY-THREE 



(CONTINUED) 

Present and Future Society – 

Health, Safety and Environment 

Beer South Africa is integrating an ISO 14001 environmental management system into its operations. An environmental 

policy has been approved, and ISO 14001 certification at all breweries is targeted for mid 2000. 

Water management is a key area within Southern Africa. 

Current use is among the lowest in the brewing industry 

worldwide. Continual improvement towards more effective 

management will be achieved through implementing 

recommendations from performance and benchmarking 

studies. Targets for water use in Beer South Africa by FY2000 

are between 4.2 and 4.9 hectolitres per hectolitre of packaged 

beer (currently between 4.6hl and 5.7hl per hectolitre of 

• SUSTAINABLE DEVELOPMENT ▪ SAB SUPPORTS THE GOAL 

OF SUSTAINABLE DEVELOPMENT – TO ENSURE OUR ACTIONS MEET 

THE NEEDS OF THE PRESENT, WHILE MINIMISING THE COST TO 

FUTURE GENERATIONS. SAB COMPANIES WILL SEEK TO CONDUCT 

THEIR ACTIVITIES WITH COMPLETE COMMITMENT TO 

INTERNATIONAL BEST ENVIRONMENTAL PRACTICE, ALWAYS 

CONFORMING TO APPLICABLE JURISDICTIONAL REGULATION AND 

SETTING TARGETS FOR IMPROVEMENTS. 

packaged beer). 

Electricity optimisation projects are run at most SAB 

breweries, with some 

achieving consumption 

performance of 9.6 kWh/hl, 

which is nearing the 

international best practice 

• MATERIAL AND ENERGY USE ▪ SAB COMPANIES WILL 

CONTINUOUSLY MONITOR AND SEEK TO MINIMISE THE 

ENVIRONMENTAL IMPACT OF THE MOVEMENT AND USE OF 

MATERIALS, ENERGY, FACILITIES AND OTHER RESOURCES IN THEIR 

OPERATIONS. THEY WILL IMPLEMENT NATURAL RESOURCE 

CONSERVATION PROGRAMMES, PARTICULARLY WATER USAGE IN 

BEVERAGE OPERATIONS. 

THE SAFETY 

EQUIPMENT ROOM AT 

LECH BREWERY. 

NILE BREWERY IN 

UGANDA IS SITUATED 

AT THE SOURCE OF 

THE NILE. 

target of 8.7 kWh/hl. Beer South Africa is also investigating alternative energy sources to reduce emissions to the 

environment, such as replacing traditional coal-fired boilers with electrode induction boilers. 

An effluent treatment plant is currently operating at Beer South Africa’s Prospecton plant, which has reduced the 

organic load in discharged water significantly. The Newlands plant installed a biological filter at the effluent handling 

facility to reduce considerably odour emissions in the nearby residential area. 

PAGE THIRTY-FOUR

All breweries have programmes to minimise waste by ensuring recycling of plastics, cardboard, cans, scrap, 

paper, scrap metal and glass. Newlands brewery has taken this further by establishing an empowerment company 

to manage and optimise waste recycling. This operation 

generates revenue of around US$8,000 (R45,000) per month. 

Kompania Piwowarska has introduced specific 

procedures for excessive noise, sewage pollution and waste. 

• RE-USE AND RECYCLING ▪ SAB COMPANIES WILL PROMOTE 

RE-USE AND RECYCLING INITIATIVES BOTH IN BUSINESS 

OPERATIONS AND IN COMMUNITIES, PARTICULARLY OF USED 

PACKAGING MATERIALS. 

These have substantially restricted or eliminated adverse 

influences on the environment. As a result, the company was the first Polish brewer to be granted a certificate of 

Cleaner Production in 1997. The company has instituted procedures for ISO 14000 compliance, and is aiming to 

achieve this by 2002. In addition to normal health and safety procedures, the company fully supports the national 

safety standard, Koniczyna, and has implemented the necessary processes to achieve five-leaf ratings. To comply with 

environmental legislation, both Lech and Tyskie breweries will convert their coal-based steam boilers to gas by June 

2002. This will save over 55,000 tons of coal per annum. Water usage by the breweries, at 6.9 hectolitres per hectolitre 

of beer, compares favourably with other European brewers. An anaerobic waste water treatment facility is planned at a 

cost of some US$4 million (R23 million), with completion scheduled for end 2001. 

In Uganda, Nile Breweries is literally metres away from the source of the Nile River. Its fine waters have been 

a direct contributor to Nile brands becoming market leaders. Accordingly, staff at the brewery are guided by a powerful 

moral and business imperative to conserve the environment by implementing cleaner manufacturing techniques. 

An environmental impact assessment has confirmed that the impact of Nile Breweries’ effluent is negligible. 

VARIOUS ENVIRONMENTAL 

PROGRAMMES HAVE BEEN 

LAUNCHED BY THE GROUP 

AND WILL BE USED TO 

MONITOR PRESENT AND FUTURE IMPACTS. 

South Africa now has the third highest beverage can recovery in the world, recovering 

over 1,8 billion cans in the past year. Collect-A-Can, which receives strong support from 

Beer South Africa, recovers 62 per cent of all beverage cans in South Africa, a rate 

considerably higher than that of other packaging material (paper 38 per cent, glass 23 per cent). Since its formation in 

1993, the company has created 20,000 jobs around the country and paid out more than US$8.8 million (R52 million) to 

PAGE THIRTY-FIVE 



(CONTINUED) 

can collectors. Its success in South Africa has led, among others, to recycling projects in Lesotho, Namibia, Swaziland, 

Botswana, Zimbabwe and Angola. 

Waste management and the reduction of environmental impacts remain an important issue for Appletiser. 

All rejected non-conformance production or production losses and wastage are recycled: cans are pressed and baled 

and sold as waste metal; bottles are crushed and returned to the supplier; and plastic and board are baled and sold to 

the suppliers. 

Southern Sun will shortly introduce a formal environmental management programme, which will include 

environmental performance evaluations, life-cycle assessments and full compliance with the SAB code of practice. 

Meanwhile, Southern Sun conforms to the international environmental standards of its franchise partners, 

Inter-Continental and Holiday Inn, and subscribes to the charter of the International Hotels Environment Initiative. 

Casino projects are being designed in compliance 

with good practice – environmentally-protective 

stormwater systems, with full water attenuation on 

site, including pollution and silt traps. At all construction 

sites, environmental management plans are in place 

• EFFLUENTS AND EMISSIONS ▪ SAB COMPANIES WILL 

ADAPT AND IMPLEMENT TECHNOLOGIES TO LIMIT AND/OR 

REPROCESS EFFLUENTS, EMISSIONS AND WASTES, INCLUDING 

REFRIGERANTS, AND TO REHABILITATE RESOURCES 

WHERE PRACTICAL. 

that govern all areas of the construction process. 

Over US$142,000 (R840,000) was spent during the year on environmental impact studies related to casino applications. 

Capital amounts specifically related to environmental 

design are budgeted at US$1.8 million (R11 million). 

COLLECT-A-CAN RECEIVES SUPPORT 

FROM BEER SOUTH AFRICA. 

Southern Sun adopts a recycling process as far as possible in managing waste from the hotels. Water and 

energy conservation practices are in place throughout the chain, and leading technologies are being specified 

for all new developments to improve the use of water and energy. In the Seychelles, where no appropriate 

environmental legislation exists, Southern Sun pioneered a sewerage treatment process in 1994. In this process, 

PAGE THIRTY-SIX

the highest South African standards were adopted and have proved successful, resulting in other developers using 

similar plants and systems, where previously effluent was simply allowed to flow out to sea. 

ABI is developing an environmental policy that conforms to ISO 14000 standards, although the company’s major 

activities do not pose a significant threat to the environment. Risk management and loss control activities already 

comply with key features of existing environmental, health and safety legislation and international standards. 

Performance is regularly reviewed against targets within ABI’s conservation initiatives. 

In Hungary, SAB has invested heavily to modernise the Budapest brewery. The plant which has been operating 

since 1854 on its original site, has been completely updated and many of the buildings restored to be able to produce 

efficiently while retaining their architectural 

splendour. Dreher’s Budapest brewery operates a 

certified ISO 14001 environmental management 

system (EMS) – a first in the food and brewing 

industries in that country. 

Training involves a wide range of staff, who 

attend courses aimed at conveying the benefits of 

the ISO 14001 standard, and explain staff 

responsibilities in implementing an 

environmental policy. Training is focused on 

DREHER BREWERIES IN HUNGARY. 

promoting understanding of ecological 

relationships, reinforcing identification with 

nature and explaining the long-term sustainable 

benefits to the company. 

PAGE THIRTY-SEVEN 



(CONTINUED) 

Dreher aims to use less environmentally harmful materials for washing and disinfecting equipment and 

packaging containers. In 1998, it introduced a washing agent preparation, which changed the proportions of the 

components for washing bottles, reducing the quantity of chemicals used and improving the quality of bottling 

plant effluent. 

Chemical use in the boiler house has decreased considerably since the commissioning of a reverse-osmosis 

water-softener. 

The renovated steam pipe system has reduced specific gas consumption and environmental stress. Although the 

value of specific gas consumption is excellent, even by international standards, Dreher aims to reduce this further with 

technical developments, included in short-term plans. 

The water from the deep wells of the Forrásmajor water-extraction site (some 80 per cent of total water use) is 

used primarily for brewing, and the water purchased from the municipal system is used in the energy-recovery plant. 

Use Units 1996 1997 1998 

New water m 3 1,695,855 1,505,000 1,286,682 

Specific water use m 3 /m 3 7.55 7.06 6.40 

The main efforts to economise water use have been rationalisation of the water supply system to reduce losses, 

eliminating or cutting off unused pipe 

sections, monthly evaluation and 

analysis of water consumption figures, 

and effecting corrective measures or 

repairs to increase the recycling of water. 

DREHER’S SPECIFIC 

ENERGY CONSUMPTION 

PROJECTED ON BEER OUTPUT 

WATER 

(m 3 /m 3 ) 

GAS 

(m 3 /hl) 

ELECTRICITY 

(kWh/hl) 

14 

12 

10 

8 

THE WATER 

TESTING PLANT 

AT DREHER 

BREWERIES. 

6 

4 

2 

0 

1996 

1997 

1998 

PAGE THIRTY-EIGHT

Dreher has prioritised the establishment of proper and efficient waste management. The foremost elements are 

identifying more types of waste that can be selectively collected and sold, and continually reducing the quantities of 

domestic and dangerous wastes. 

In 1998, a three-year waste management plan was 

introduced and selective waste collection was started in the 

brewery. Central waste collection yards were set up where 

containers for separate collection of paper, cardboard, plastic 

sheeting, broken glass and metal have been placed. 

In the last three years, concentration of production has 

reduced the number of air pollution point sources. Dreher now 

has only one emission point. No limits have been exceeded and 

emission values are below those permitted for the site. 

The Budapest brewery set up an effluent pre-treatment 

plant in 1997. It removes solid waste and neutralises sewage to 

within limit values. In the effluent neutralisation plant, the 

sewage pH has been optimised and unpleasant odours eliminated 

by rationalising the process and installing chemical feed 

equipment. 

During the latter part of this year, Dreher aims to reduce 

noise levels emanating from deliveries and brewing house activities. 

DREHER’S EFFLUENT PLANT. 

REGULAR WATER TESTING AT DREHER BREWERIES FORMS 

PART OF ITS ENVIRONMENTAL MANAGEMENT. 

PAGE THIRTY-NINE 


Linking 

the Profits... 

• S HAREHOLDERS 

• PARTNERS 

• O THER PROVIDERS OF CAPITAL 

Distribution of Cash Value Added 

Historically the Cash Value Added statement was conceived and developed by SAB to provide more transparent 

disclosure for stakeholders. However, we also believe that the adoption of this value added approach highlights the 

sharing of wealth from a stakeholder perspective. This statement illustrates the activities of SAB in such a manner as to 

show clearly the cash value 

generated and the distribution 

of these funds. 

• FRANCHISORS AND PARTNERS ▪ SAB WILL ONLY DO BUSINESS WITH THOSE PARTNERS 

AND FRANCHISORS THAT SUBSCRIBE TO OUR COMPANY VALUES, BUT WILL RESPECT THE VALUES 

AND CULTURES OF THE COUNTRIES IN WHICH WE OPERATE. 

The cash value added (wealth created) by the Group amounted to 

US$2,5 billion (R15 billion) after paying US$2,3 billion (R13.5 billion) 

VARIOUS PRODUCTS AND SERVICES ARE ENJOYED BY 

OUR CUSTOMERS AROUND THE WORLD. 

to suppliers of goods and services during the past year. We transformed these goods and services, by utilising our 

human and technological skills, into our own unique products. Our products and services were sold to our customers 

and consumers for US$4,8 billion (R28 billion). 

This wealth was distributed among our stakeholders. The 49,000 employees of the Group received 

US$820 million (R4.8 billion), or 33 per cent of the total wealth created, in return for their skills and effort. 

PAGE FORTY

The cash value added per employee amounted to US$51,000 (R300,000) and the cash value added per US$100 of 

employee remuneration amounted to US$306. 

SAB paid US$941 million (R5.5 billion), or 37 per cent of total wealth created, in direct and excise taxes to state 

treasuries. Lenders and shareholders received US$78 million (R462 million) and US$230 million (R1.4 billion) in cash 

respectively or in total 12 per cent of the wealth created, as remuneration for capital provided. The shareholders’ 

compound annual rate of return – the increase in the share price and dividends paid to shareholders – as measured on 

the Johannesburg Stock Exchange (in rand) over the past seven years amounted to 15.1 per cent. This compares with 

the 7.8 per cent achieved by the ten largest comparable industrials on the JSE over the same period. 

After providing more than 2 per cent of pre-tax profit on corporate social investment, the Group retained 

US$431 million (R2.5 billion) in the business to fund the replacement of assets and facilitate future growth. 

This represents 17 per cent of the cash value generated, 

which is being reinvested in the Company to ensure future 

wealth creation. These funds were spent on maintaining 

and expanding the Group’s current infrastructure 

(US$545 million) and on the acquisition of new businesses 

• RETURN ON INVESTMENT ▪ SAB SEEKS TO MAXIMISE TOTAL 

SHAREHOLDER RETURN (“TSR”), ACHIEVING A COMPOUND 

GROWTH RATE IN DIVIDENDS AND SHARE PRICE WHICH, OVER 

TIME, AIMS TO BETTER THAT ACHIEVED ON COMPARABLE 

INVESTMENTS. 

(US$273 million) – the balance being funded by 

new capital and loans raised. 

• LOCAL ECONOMIC IMPACT ▪ SAB COMPANIES 

SEEK TO HAVE A POSITIVE IMPACT ON LOCAL ECONOMIES, 

THROUGH PROFITABLE AND SUSTAINABLE COMMERCE. 

EXPANSION OF THE GROUP’S CURRENT INFRASTRUCTURE ENSURES FUTURE WEALTH CREATION. 

• COMMUNICATION WITH INVESTORS, LENDERS AND ANALYSTS ▪ 

SAB VALUES THE SUPPORT OF ALL OUR PROVIDERS OF CAPITAL, LARGE AND 

SMALL, AND SEEKS TO COMMUNICATE WITH THEM REGULARLY AND OPENLY, 

PROVIDING RELIABLE AND TIMELY FINANCIAL AND OTHER INFORMATION. 

PAGE FORTY-ONE 


Group Cash Value Added 

FOR THE YEAR ENDED • 31 MARCH 1999 

1999 1999 

US$m Rm 

Cash generated 

Customers and consumers 

Cash received by SAB for the supply of its products and services 4,803 28,243 

Suppliers 

Cash payments outside the Group for materials, facilities 

and services purchased (2,290) (13,466) 

Group cash value added 2,513 14,777 

Distribution of cash value added 

Remunerate employees for their services 820 4,824 

Pay direct and excise taxes to state treasuries 941 5,531 

Provide lenders with a return on borrowings 78 462 

Provide shareholders with cash dividends 230 1,352 

Corporate social investment (2.2% of pre-tax profit) 13 77 

Cash retained in the business to fund future growth 431 2,531 

2,513 14,777 

SAB MAINTAINS AN EQUITABLE AND BALANCED 

DISTRIBUTION OF VALUE ADDED AMONG ALL THE 

STAKEHOLDERS IN THE BUSINESS 

17% 

EMPLOYEES 

1% 

33% 

STATE TREASURIES 

9% 

LENDERS 

3% 

SHAREHOLDERS* 

CORPORATE SOCIAL INVESTMENT 

37% 

RETENTION FOR FUTURE GROWTH 

*This includes in excess of US$170m (R1bn) of dividends paid by SAB Limited to shareholders 

before the transformation to SAB plc and the London listing 

PAGE FORTY-TWO


C ORPORATE 

C ITIZENSHIP 

Readers’ Comments 

Which stakeholder group is applicable to you/your organisation? 

Employees □ Shareowner □ 

Consumers □ The Environment □ 

corporate citizenship review 

31 march 1998 

Suppliers □ Communities □ 

Customers □ Government □ 

Lenders of capital □ Other (Please state): 

R EVIEW 

1999 

Each of the sections in the Review refers to one or more of the stakeholder groups. 

Please rate this information concerning stakeholders in terms of: 

Poor Average Good Excellent No opinion 

Credibility 1 2 3 4 0 

Clarity of content 1 2 3 4 0 

Relevance of issues 1 2 3 4 0 

Coverage of issues 1 2 3 4 0 

Clarity of tables/graphs 1 2 3 4 0 

Layout and design 1 2 3 4 0 

Which sections were most interesting to you? 

What was omitted or not covered adequately? 

Comments/Suggestions: 

Having read this Review, has your overall perception of SAB plc changed? 

Improved □ Worsened □ Remained the same □ 


Your comments on this Review should be faxed or mailed to: 

Group Corporate Accountability Manager 

Alison Ramsden 


BUSINESS ADDRESS AND REGISTERED OFFICE 

2 Jan Smuts Avenue 

Braamfontein 

South Africa 

2017 

POSTAL ADDRESS 

PO Box 1099 

Johannesburg 

South Africa 

2000 

Telephone +27 11 407 1700 

Telefax +27 11 339 2389 

E-mail aramsden@sab.co.za. 

This Corporate Citizenship Review is available on the Internet at http://www.sabplc.com


REGISTRATION NUMBER • 3528416 

EXECUTIVE DIRECTORS 

E A G Mackay (Group Chief Executive)† 

N J Adami (Managing Director: Beer South Africa) 

N G Cox (Group Financial Director) 

G H L Goedhals (Group Managing Director: SABI) 

R L Lloyd (Managing Director: SABI Europe) 

M H Simms (Chairman: Other Beverage Interests) 

R J Stringfellow (Chairman: Hotels and Gaming) 

M I Wyman (Group Corporate Finance and 

Development Director) 

*Audit Committee 

†Nomination Committee 

‡Remuneration Committee 

NON-EXECUTIVE DIRECTORS 

J M Kahn (Group Chairman)†‡ 

H R Collum*†‡ 

The Lord Fellowes 

M J Levett* 

M Q Morland*†‡ 

M C Ramaphosa 

Lord Renwick of Clifton*†‡ 

H R Slack* 

Dr C B Strauss 

COMPANY SECRETARY 

A O C Tonkinson 

REGISTERED AND HEAD OFFICE 

25 Grosvenor Street, London,WIX 9FE 

Telephone +44 207 6590100 

Telefax +44 207 6590111 

BASTION GRAPHICS

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