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Fierce battle in beverage market as SABMiller re-enters Kenya

Giant beverage manufacturer SABMiller Plc has re-entered the Kenyan market after acquiring Crown Foods Limited, the producer of Keringet brand of natural mineral water.
In a move bound to shake the local beverage market, The Standard has established that SABMiller acquired Crown Foods late last year at an undisclosed amount and has since been engaging in elaborate restructuring.
"Crown Foods is under new management. SABMiller has been around since December," said an employee of the company.
However, she could not give more details on the closely-guarded acquisition because she is not allowed to speak on behalf of the firm.
But SABMiller Head of Media Relations Nigel Fairbrass confirmed the acquisition. Speaking to The Standard from London, Fairbrass said the move was in line with the company’s strategy to grow its continental market reach.
"It is correct we have acquired 100 per cent of Crown Foods, but we cannot disclose the amount. The deal was completed in December last year," he said.
The new team will be headed by Jason Schmidt, who according to SABmiller website, was the Managing Director of Voltic Ghana Ltd, a subsidiary of SABMiller and the leading producer of natural mineral water in Ghana.
The revelations that SABmiller, a long time arch-rival cum business partner of East Africa Breweries Limited (EABL), has re-entered the local market after a 10-year absence is bound to send shockwaves in the beverage industry.
Just yesterday, SABMiller Africa Managing Director Mark Bowman told investors the company had revised its business outlook for the African operations upwards.

Capital expenditure
"Over the past three to four years, we have invested over $1.5 billion (Sh120 billion) in capital expenditure, increasing our capacity and market penetration, in addition to taking us into several new markets through acquisitions. This investment is paying off and we are expecting to further cement our position as the leading brewer on the African continent," he said in a press release.
Currently, Crown Foods products are basically mineral waters and juices, but observers content SABMiller would not be satisfied with that line alone and wants to use the well known company as a launching pad to venture into its core business of beer manufacturing.
Recently, the company terminated a deal with EABL that saw it exit the Kenya Breweries Ltd (KBL) where it controlled a 20 per cent stake, according to an agreement entered in 2002 that saw the company close its Castle Breweries Ltd in Thika, and exit the Kenyan market.
Though EABL top management has repeatedly stated the company is not perturbed by the prospect of SABMiller making a re-entry to the Kenyan market, there is no doubt a bruising battle for the control of the local market is now in the offing.
"We are ready for SABMiller if they come back to Kenya. We welcome competition," said EABL Group Managing Director Seni Adetu sometime last year.
Efforts to get a comment yesterday from EABL corporate affairs director Brenda Mbathi were not successful after she failed to respond to a text message sent to her number.

22 Mar. 2011

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