Download Sabmiller Plc Annual Report 2012 PDF

SABMiller plc Annual Report 2012 9KilimanjaroOrigin: TanzaniaFirst brewed: 1996www.kilitimetz.comNamed after the iconic mountain and better knownin its home market of Tanzania as ‘Kili’, this crisp, mild,easy-drinking, refreshing natural lager is light in colourwith a slightly bitter taste.The year’s second major transaction was ourstrategic alliance with the Turkish beer and softdrinks business, Anadolu Efes, under which wehave transferred our Russian and Ukrainian beerbusinesses to Anadolu Efes in return for a 24%stake in the enlarged Anadolu Efes group. AnadoluEfes will now be the vehicle for both groups’investments in Turkey, Russia, the Commonwealthof Independent States (CIS), Central Asia and theMiddle East. As well as leading the beer and softdrinks markets in Turkey, Anadolu Efes has strongpositions in Kazakhstan, Moldova and Georgia,all of which are developing fast. In Russia, thecombined business has a strong number twoposition and is benefiting from greater scale,an attractive portfolio of brands and cost synergyopportunities amounting to at least US$120 million.The two partners will share best practice andAnadolu Efes will develop SABMiller’s internationalbrands across the territory.We have also developed our strategic alliancewith Castel in Africa. We are now responsible for theoperational management of the Nigerian businesseswhile Castel has taken over the running of theAngolan businesses.In China, our CR Snow joint venture continuedits expansion with a number of bolt-on additionsincluding the acquisition of the remaining interestin Hangzhou Xihu Breweries from Asahi Breweries.The moves further consolidate CR Snow’sleading position.Along with widening our geographic footprint, wehave continued to invest in capacity. In responseto rising demand in Africa, we have already investedUS$1,500 million in the continent over the last fiveyears. But such is Africa’s rate of growth thatdemand continues to outstrip supply and we nowneed even more capacity. We have consequentlyembarked on a US$260 million programme tobuild a new brewery in Uganda and add capacityin Ghana, Zambia and Tanzania. The projectsannounced last year – the new brewery in Nigeriaand the major expansion in South Sudan – areprogressing well.In November 2011, we also announced a US$295million capital investment programme to increasecapacity and support future brewery expansionat our Peruvian subsidiary.As a result of this continued expansion, wenow have operations in over 75 countries on sixcontinents with breweries in such far-flung placesas the Gobi Desert, the High Andes, the banks ofthe Nile and the Tasman coast.Building a global leaderAs one of the world’s largest and most respectedbrewers with strong positions in every region,SABMiller has come a long way from its origins atthe foot of Africa. On the eve of my retirement, I amproud of the group’s achievements over the years.Looking back, the trigger for our internationalgrowth was the recognition by the board ofSouth African Breweries, as it was then, that globalconsolidation was about to hit the worldwide beerbusiness as it had done other consumer goodssectors such as food and soft drinks. At this pointin the late 1980s, the beer industry largely consistedof local and regional businesses, many still run bythe founding families. We saw an opportunity tolead the consolidation that we knew was comingand we took it.Starting close to home in Africa, we beganto acquire brewing assets – typically fromgovernments wanting to privatise. Many hadbeen neglected under public ownership, so wererelatively cheap to buy. Our strategy was then toestablish market leadership and build local brands.Next we applied the rigorous operational disciplineslearned in South Africa to drive down costs,achieve world-class standards in our breweriesand distribute our products more efficiently.From a position of leadership, we then soughtto enhance the industry’s business practices,market responsibly and initiate local socialinvestment programmes.We’ve continued to expand ourgeographic footprint, consistentwith our strategy of creating abalanced and attractive globalspread of businesses.Moving out from Africa, we began acquiringbusinesses in newly liberalised Eastern Europeand the vast emerging market of China. As ourgrowth continued, we clearly needed access tofurther capital. In 1999, therefore, we took themajor step of moving to London and listing onthe London Stock Exchange. Further expansionfollowed. In 2002, the addition of Miller in the USAtook us into the global beer industry’s biggest profitpool. Despite widespread scepticism that a brewerfrom South Africa could succeed in the world’smost sophisticated consumer market, we knew themove was necessary if SABMiller was to continueplaying a decisive role in the industry’sconsolidation. And succeed we did.US$260mInvestment in newcapacity in AfricaOverview Business review Governance Financial statements Shareholder information