Bralirwa turns to regional market as earnings decline

Bralirwa, Rwanda’s biggest brewer, is looking to the East African Community market to drive its sales. This follows low export earnings and volumes over the last year, 2013, the brewer indicated in its 2013 financial statement. In the statement released on Monday, the firm attributed its poor performance on prohibitive duties charged in the Democratic Republic of Congo (DRC) market last year, limiting its export potential. According to the report, the company’s exports fell by 29 per cent last year compared to 2012, largely due to increased taxes levied by the Democratic Republic of Congo, presently its biggest export market. Jonathan Hall, the Bralirwa managing director, said the firm would continue to face challenges in the DR Congo market if the taxes are not reduced. “As the DR Congo market continues to be challenging, we are going to explore new export markets in East African Community bloc. So, there will be more upgrading investment by Bralirwa in anticipation of continued growth in Rwanda and regional beverage markets,” he noted. However, Bralirwa will have to contend with stiff competition from regional market players like East African Breweries Limited, Nile Breweries, Uganda Breweries and SAB Miller which have strong presence in the region. Meanwhile, Hall said Bralirwa has over the past two years embarked on aggressive capital expansion plans in order to increase on their market share. The Rubavu District-based brewer, known for its beer brands Primus, Mutzig, Amstel and Turbo King, and Heineken which is imported from Holland, made a Rwf42.25b capital investment at the Gisenyi brewery, the Kigali soft drinks plant and bought irrigation equipment for its 260 hectares of maize. Last year, Bralirwa made a 0.6 per cent drop in production sales volumes last year to 1.65m hectoliters last year from 1.66m hectoliters in 2012. As a result, the firm’s revenue grew by two per cent from Rwf76.99b in 2012 to Rwf78.5bn last year, with a dip in after tax profit of 18.8 per cent from Rwf19bn to Rwf15.46bn in the same period. Hall attributed the performance to slower economic growth trends in Rwanda and the region, which directly affected people’s spending power and depreciation of the franc which increased costs of sales. According the National Institute of Statistics of Rwanda, the country’s growth rate fell to 4.6 per cent in 2013, after averaging 8.2 per cent from 2006 to 2012, partly due to aid cuts by some donors.

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Bralirwa turns to regional market as earnings decline