SABMiller on revamp mode to gear up for growth phase

Hindu Business Line, 16-September-2008

K. Giriprakash

Bangalore, Sept. 15 After consolidating its operations in India, SABMiller has restructured its organisation to gear itself up to the growth phase.

“We have now moved to the next phase of our business,” SABMiller’s Director for corporate affairs, Mr Sandeep Kumar, told Business Line.

SABMiller now has a new structure with regional sales heads operating each of the three regions in the country and most of the functions such as sourcing, technical, brewery operations and planning functions have been centralised.

Earlier, each regional head was responsible for all the operations in his respective region. Mr Kumar said the new structure is expected to make the company more responsive and bring it more in line with market conditions.

SABMiller also proposes to issue and allot on preferential basis 5 crore of equity shares at a face value of Rs 10 each SABMiller Asia BV at a premium of Rs 46 per share for its corporate needs.

It will increase the promoters’ holding marginally to about 99.38 per cent. Mr Sandeep Kumar also said that over the last one year, the diversified portfolio of the second largest beer maker in India has also been consolidated. Out of 18 brands, now six key brands have been brought into focus.

Beer brands

He said SABMiller plans to launch a new beer brand, Indus Pride, in the mild segment and a 100 per cent malt-based beverage sometime later next year.

He said while Foster’s, its premium beer, has grown by over 45 per cent during the last year, its global brand, Peroni has been launched in Mumbai, Delhi and Bangalore markets. In Mumbai, it has a 35 per cent market share of the imported beer market.

Its other brands, Royal Challenge has grown by 12.8 per cent and Hayward’s 5000 has recorded a growth of 13 per cent.

Market share

SABMiller and United Breweries together own nearly 90 per cent of the share of the beer market in India. SABMiller’s market share is 35 per cent in the Indian beer market, which is about the same as last year’s.

During the last fiscal, it invested about Rs 281 crore in upgrading existing plant and machinery and developing capacity.

It has also set up new can lines in its Mysore Breweries as well as Rochees Breweries.

The beer manufacturing giant has so far invested about $650 million in India and plans to add 9 million cases each year, according to its plans, through a mix of organic growth and addition of newer capacities.