19 October 2012

Rwanda: Skol Brewery Welcomes New Owner Unibra

Brasserie des Mille Collines (BMC) have officially sold their 51% stake in Skol beer (Rwanda) to Unibra, a Belgium-based brewery, giving the latter 100% ownership. The company has also been renamed Skol Brewery Limited (SBL). The price of the take-over has not been made public.

The takeover makes it easier for the new owners to embark on an aggressive capital expenditure plan aimed at increasing the market share of its Skol beer and the recently introduced Gatanu.

"The brewery is undergoing a five-year Capex plan (Capital Expenditure plan) of more than US$15 million, earmarked for equipment and packaging for capacity expansion. This should see the brewer grow its output significantly," said Unibra's Christopher Thibaut.

Normally, the purpose of the Capex planning process is to ensure that the organization's limited capital is spent on only those projects that maximize strategic goals of the investor to ensure profitability. For Unibra, this means focusing on equipment and packaging for capacity expansion as the way to take Skol Brewery to the next level.

In the two and a half years they have spent on the market, BMC have managed to introduce Skol beer as a serious competitor against Bralirwa beverages, although the latter still remain dominant. As of 2012, the Rwandan beer market was estimated at around 1.2 million hectoliters, of which Skol contributes about 100,000 hl, or 8% of the total market. This can be explained by the fact that Skol is still relatively new in the market (at least compared to Bralirwa's beer brands) and that until recently the company sold only one brand.

Nonetheless, Thomas Weingarten, Skol's managing director, says there is an increasing demand for Skol beer whose main strong point, he explained, is the fact that it's "a quality brand of international repute." He pointed out, however, that the main obstacle to its production is that its main ingredient is malt, which is difficult to find on the local market and is so far mostly import from Europe.

The brewery's introduction of a new brand with a local feel, Gatanu, is expected to boost their market share beyond 10%.

Unibra, which owns Skol rights in Africa and currently serves six countries, earned profits of €5,626,746 in 2011 and €6,988,563 in 2010.

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