Tag Archive 'SABMiller'

Oct 05 2009

And what about transparency in big companies?

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I’m back on this issue of information dissemination and transparency. Sorry, for boring you. But, as far as I’m concerned, the danger lurking behind it is (in the long-term) on a par with the danger which emanated from the financial sector for the world economy in the years before 2008**.

I’m referring to the duty of listed companies to inform the public of what they are doing. And the games some multinationals play when it comes to this “duty to disclose”.

Stock exchanges say their listed companies must publish all information of “wesenlike belang”. Fine. But, it’s over to those companies to interpret “wesenlike belang” and boy, do these interpretations run amok!

Some say, when the CEO of a major subsidiary in Europe resigns, it is of “wesenlike belang” and a press release has to go out. Others don’t. Some lose R500 million and say it’s not important enough to tell the shareholders. Others lose R1 million and release a long statement.

What is “wesenlik” varies from company to company, depending on their sizes and who is at their helms.

When companies operate in countries with strange languages, the definition of what needs to be communicated to the outside world, gets even fuzzier. What is easier for a SA listed company than to do business in eastern Europe and never release any information in English about what it does there? The local media may report, but the news seldom make it out of the country. And the JSE doesn’t have the foggiest…

In short, the issue of information dissemination is a thorny one – and open to manipulation.

Naspers is right up there when it comes to “playing around” with this duty to inform. It always moves in the grey area, releasing only the bare minimum and then immediately withdrawing behind high walls when asked for more. Yes, it’s quite ironic, that a company which started out as a “house of journalists” should now be so shy when it comes to disseminating information.

I was reminded again of this truth, when reading this article by Reuters. (It’s about Naspers wanting to extend a $800 million loan by 2 years from 2011 to 2013….pretty important, I’ll say. Why isn’t there anything about it on the Naspers portal under “Media Centre”?)

I refer here to Naspers, but I’m sure what is true here, is true for many big companies out there.

There are, of course, also the exceptions. And, I’m proud to say, some of the best big companies (in this regard) are also SA-linked. Take, for instance, SABMiller, the 2nd biggest beer company in the world.

In my experience, this is a multinational which takes its duty to inform seriously! A quick glance at the SABMiller and Naspers corporate websites confirms this view. The one is lively, packed with news and efforts to build a positive image. The other is static, thin on press releases and reminds of a history lesson.

So far this year Naspers has published nine press releases, including one on the Paarl fire and one on prizes awarded by Ton Vosloo. Between 23 September 2009 and 5 October 2009 (a period of 12 days) SABMiller published exactly the same number of press releases – nine.

If a multinational company such as Naspers (working flat-out to internationalize) adhered to the JSE and LSE rules on disclosure with nine press releases over nine months, then the JSE and LSE rules are too slack.

** The bankers have done their bit to rubbish the image of the free market; non-transparent, arrogant company bosses may still push the world economy into the arms of the socialists.

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May 15 2009

A cynical take on SAB’s efforts to look green

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I’ve written before about the shocking fact that five liters of water go into making one liter of beer.

Well, that’s the average for breweries around the world today. Thankfully, our own South African Breweries (SAB), the world’s second biggest brewer, averages a little below the 5-liter mark.

And it’s quite active in this area, doing whatever it can to further lower its water-use. That’s why I was very impressed when I first saw SAB was cooperating with the WWF to develop “water-neutral breweries”. Look here.

That was until I read the article and noticed the SAB/WWF project was more about “SAB securing its own interests” than about “SAB doing something good for the environment”. (Unless you think brewing beer is doing something good for the community and the environment. In fact, it reminds me of what that famous French lady once said: “No more bread? Well, let them eat cake.”)

For example, trees are to be chopped down on Table Mountain, to secure the water supply to the SAB brewery in Newlands.  

Would the better water conservation programme here not be to close the brewery down? Read the article and let me know whether I’m a bit “over-cynical” and/or “over-sceptical”. After all, the WWF has been around a while – it won’t allow itself to be taken for a ride. Or would it?

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Mar 25 2009

SABMiller: From 21 to 60 in ten years

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It’s 10 years since SAB went to London.

Tim Cohen, ex-Business Day man, wrote a very nice piece about “the war” which SABMiller is fighting (and winning) for market share all over the world. The article is based on an interview he had with SABMiller chairman Meyer Kahn. Great read.

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Mar 20 2009

SABMiller buys out own JV partner in Vietnam

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SABMiller today announced the buy-out of its joint-venture partner in Vietnam.

It acquired the 50% held by Vietnam Dairy Products Joint Stock Company (“Vinamilk”) in the company SABMiller Vietnam JV Company Limited.  All conditions to the transaction have been fulfilled and SABMiller Asia BV is now the sole shareholder of the SABMiller Vietnam JV Company Limited, the company said on its own website.

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Mar 17 2009

BT to provide SABMiller with telecomms

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British Telecommunications (BT) today announced a five-year deal worth $120 million, to deliver network and telecommunications services (including global data centre connectivity) to beer brewer SABMiller in Latin America, Europe and Hong Kong. 

More specifically, BT will provide and manage the company’s communications and networked IT services needs in Latin America (Peru, Ecuador, Colombia, El Salvador, Honduras and Panama), Europe (UK, Netherlands, Switzerland, Italy, Spain, Poland, Czech Republic, Slovakia, Germany, Romania and Hungary) and global connectivity services into North America, South Africa and Hong Kong. 

BT operates in 170 countries. Its principal activities include the provision of networked IT services, local, national and international telecommunications services for use at home, at work and on the move, broadband and internet products and services and converged fixed/mobile products and services. In the year to 31 March 2008, BT Group’s revenue was £20,704 million, with profit before taxation and specific items of £2,506 million. 

British Telecommunications is a wholly-owned subsidiary of BT Group, which is listed in London and New York. 

Full press statement here.

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Mar 13 2009

SABMiller opens that wallet in China

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Graham Mackay, boss of SABMiller, forked out $42 million for a strategically important acquisition in the Shandong Province of China. Here’s what Harpers had to say:

Brewing giant SABMiller has acquired one of China’s largest breweries in a $42 million joint venture that will expand its influence in one of the world’s most lucrative markets.

The latest deal, a joint venture with China Resources Snow Breweries Limited (CR Snow) in conjunction with China Resources Enterprise Limited (CRE), will see SABMiller take full control of the Hupo Brewery in northern Shandong Province within three years.

Comment: While InBev falls from the one crisis to the next to digest the US acquisition which made it the biggest brewer in the world, the second biggest SABMiller cheerfully treks around the world to pick off the juiciest bits in the best markets. Read this blog post. The one is bound to the mature American market, while the other has his eye on the markets of tomorrow. It’s already clear who is going to be the number one in a few years’ time…   

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Mar 11 2009

Grolsch brand now brewed in Russia

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SABMiller RUS, the Russian subsidiary of SABMiller, started production of the Grolsch beer brand Amsterdam Navigator at its Kaluga brewery in Russia, wrote Nadezhda Frolova from Moscow on the SABMiller website yesterday.

More interesting than the production start is, however, the way the article was written and most interesting is that SABMiller published the Frolova article on its company website without editing it. 

The Germans would have said: “Sehr sympatisch”. I wonder whether it will stay unedited for long.

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Mar 11 2009

SABMiller’s Chinese partner to buy three competitors

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For my archive, this article reported by AsiaInfo Services.

CR Snow to buy three beer firms for RMB749 million

China Resources Snow Breweries (CR Snow) announced that it would acquire three of its domestic peers for RMB749 million, including RMB633 million cash.

CR Snow brews China’s leading beer by volume, namely Snow, in partnership with SABMiller. 

The three targets are Anhui-based Anqing Beer, Liaoning Songlin Beer and Zhejiang Luck Beer.  CR Snow plans to set up three subsidiaries to take charge of the deals. And in the three subsidiaries, it will take an 80 percent stake, an 85 percent stake and a 100 percent stake, respectively.

Liaoning, Anhui and Zhejiang are three major markets for CR Snow, Chen Lang, managing director of China Resources Enterprises (SEHK: 0291), said in an interview. And the deals will help it show a greater presence in the three markets.

Tianzhu Beer sold about 40,000 kiloliters in 2007. Songlin Beer, which has two subsidiaries, sold about 105,000 kiloliters of beer in 2007. Its annual production capacity was 208,000 kiloliters, and the figure is expected to be lifted up to 250,000 kiloliters after technology innovation. Luck Beer had an annual production capacity of 120,000 kiloliters in 2007, with sales volume hitting 33,000 kiloliters. CR Snow, which has an annual production capacity of 11.7 million kiloliters currently, will own an annual production capacity of about 12.17 million kiloliters after the deals.

Small- and mediumsized beer companies in China came under rising pressure from soaring raw material prices and frequent natural disasters in 2008. Because of this, the large beer companies in China stopped merger and acquisition activity in the country in succession, which caused the value of the nation’s beer assets to fall to about RMB2,000 per kiloliter from RMB7,000 per kiloliter previously.

However, this may be viewed as an indication that it is an opportune time to launch acquisitions in the nation’s beer market, said industry experts.  The average cost of the aforesaid three CR Snow deals is less than RMB2,000 per kiloliter.

Backed by China Resources Enterprises (SEHK: 0291) and SABMiller (LSE: SAB), CR Snow invested RMB650 million in setting up a 400,000 ton plant in Shanghai, the financial hub of China, at the end of 2008.

Source:  AsiaInfo Services

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