KBL, BBL merger to deliver growth prospects for Botswana beer market
Mmegi.bw - Jul 19th, 09:29
Kgalagadi Breweries Limited (KBL) managing director Johan De Kok says the amalgamation of KBL and the Botswana Breweries Limited (BBL) is expected to do away with unnecessary costs and deliver strategic opportunities arising from a leaner supply chain.
The two entities operate as a single entity under the name Kgalagadi Breweries Limited. The merger has been described as necessary for future survival and profitability. Speaking at the company's 40th anniversary celebrations in Gaborone, De Kok said the merger, which took effect April 9, 2013 "presents opportunities for rationalisation of depots and operating plants as well as provide increased potential to leverage scale across the new entity and increase efficiency and extract other than enhancing business benefits and synergies.
As a result, it has been announced that the new entity will now operate four divisions being the manufacture, distribution and sales of clear beer, soft drinks and traditional opaque beer respectively and also importation, distribution and sales of alcoholic beverages and soft drinks".
The Botswana Stock Exchange (BSE) listed Sechaba Holdings owned 60 percent of both KBL and BBL. After the amalgamation, Sechaba now holds 60 percent in the new entity with global brewing giant, SABMiller holding the rest. However, De Kok acknowledged that the company has not been without challenges, which in turn had an effect on the economy and stakeholders at large. He explained that the company suffered a blow in 2005 with the devaluation of the Pula, which increased import costs followed by the introduction of the alcohol levy in 2008.
"This, together with the ever-rising input costs, continue to threaten the company. Despite these challenges, the amazing people that we have as business partners and customers ensured that we remain as competitive as we could be and that we continued to deliver our quality products and all the promises we made," stressed De Kok. He also said the company has embraced the concept of corporate social investment with contribution to sports sponsorship and developing young entrepreneurs through the Kickstart programme. From Mmegi.bw
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