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Stable economy bolsters SBL growth and wealth creation

  • Employs over 800 people creating around 1 pct of GDP
  • Brewer believes improved infrastructure will spur further growth

Serengeti Breweries Limited has evolved from a small operation based in Dar to a large manufacturer with three breweries producing world class award-winning beer and spirits brands. The Business Standard Reporter caught up with the newly appointed SBL Managing Director, Mark Ocitti, to find out what the first East African CEO, vision for the company is and his view on Tanzania’s business environment that are both critical in defining SBL’s next level of growth. Excerpts…..

Q. SBL is relatively a young company that begun operations in 1996 in Dar es Salaam before expanding to open two more plants in Mwanza and Moshi. What has been the role of the company in terms of bringing prosperity to the people of Tanzania?

A. SBL has made a huge contribution to Tanzania’s wealth creation and distribution in many ways. The company is one of the country’s large payers. In 2018 SBL total tax payment to the government was over 120bn/- which is around 60 per cent increase from 70bn/- paid in five years ago (in 2013). SBL has a strong employer brand.

The company employs over 800 employees directly and indirectly impacting thousands of lives in the process with good health care and education systems.

Overall, our company contributes one per cent to Tanzania’s GDP according to an independent study conducted by Deloitte in 2018 to assess the impact of SBL to the Tanzania economy. The study established that SBL company activities across the value chain makes this level of contribution to the country’s GDP. Community support is part of our company’s DNA and this is all the way to supporting sports and entertainment.

Our flagship beer brand – Serengeti Premium Lager – is for instance the official sponsor of Taifa Stars, Tanzania’s national soccer team, while SERENGETI PREMIUM LITE is the main sponsor of the Women national football premier league. We also support artists in the local music industry.

Q. Brewing involves using natural ingredients including cereals to make beer. Tell us about how SBL sources its raw materials and how this benefits Tanzanian local farmers.

A. SBL is heavily dependent on local farmers for its raw materials. By end of last year SBL sourcing of cereals from local farmers grew to 15,000 metric tonnes equivalent to 60 per cent of the company annual total raw materials requirement. To create a win-win situation for the growers and the company, SBL supports a network of over 400 local farmers across the country growing cereals used in beer production – barley, maize and sorghum.

The support to the farmers include providing them with free seeds, technical field extension services, business planning education, as well as contracts which they then use as collateral to access credit facilities from financial institutions. This has enabled farmers to adopt mechanized farming, increasing productivity and enhance their economic wellbeing.

Q. Serengeti Premium Lite has been awarded a super brand status for 2019/2020 in recognition of the beer’s outstanding quality, reliability, and distinction by its customers. • How is the company innovating to bring new products to the region in order to increase its presence?

A. Innovation and quality are at the heart of our business. We have consistently tried to introduce new products into our portfolio to meet changing taste and needs of our customers. In doing so, quality is key and that’s why nearly all the company beer and spirit brands have won different awards locally and internationally.

The Superbrand Award for SERENGETI LITE is one among the brand quality recognitions. We pride ourselves in having the widest portfolio of alcoholic beverages in our industry and as a responsible industry player this is set to grow even further as the needs of our consumers demand.

Q. SBL was recently reported to be undertaking a 10 million expansion programme to its breweries in Moshi ad Dar es Salaam. Can you update us the progress on this and how the investment contributes to the fifth phase government industrialization agenda?

A. Tanzania has in the recent years witnessed growth of the alcohol market, which is mainly due to price stability of alcohol products made possible by recent moderate tax increases by the government. This stability has driven sales volumes, increased government revenue but most importantly, reduced consumption of informal alcohol in so doing promoting public health. SBL’s current expansion programme in Dar es Salaam and in Moshi is partly a result of this stability.

While we appreciate government’s clear attempt to improve the business environment, we believe that the policy of only moderate excise duty increases should be maintained going forward to support our expansion and that of the industry. This will not only spur growth in the industry in so doing increasing our contributions to the economy but also attract increased investments into other sectors of the economy as well.

The SBL expansion programme is set to create new job opportunities, further increase government tax revenue and create additional demand for supplies from local farmers. This is truly wealth creation and distribution.

Q. President Magufuli is known as the “bulldozer” for his emphasis on building roads and infrastructure. The SGR project and the improvement of the Dar es Salaam Port are two examples. • How does his emphasis on infrastructure assist Serengeti Breweries in its operations and objectives?

A. Indeed we depend on road transport to move our products to every corner of the country from our three breweries in Moshi, Dar and Mwanza. Good roads and SGR in place will greatly reduce time and cost of doing business.

We fully support the government for these investments as well as for prioritizing other social service provision in sectors of water, electricity and so on.

Our advice though is that these improvements should go hand in hand with improving operational processes such as reducing lead time in clearing consignments at the Dar port where importers, SBL included, suffer heavy demurrage costs as a result of delays in clearing goods at the port due to operational inefficiencies.

Q. Tanzania’s economy has grown 7 per cent in 2018 and is projected to grow by 6.6 per cent in 2019. This maintains Tanzania amongst the list of countries in Africa with the fastest growth rates. • How is your company assisting Tanzania in its growth path?

A. The consistent and good performance of the economy over the past decade has been one of the driving forces behind SBL’s increased tax contribution to the government, employment creation and the current expansion programme. As a country, we have done well on managing the macro-economic but as said before, we can do even better by getting more operationally efficient.

Q. Corporate Social Responsibility plays a major role in most large organizations these days, as a way of giving back and empowering the community in which it operates. • How is the company working to empower communities in the country?

A. SBL is a Tanzanian company thriving on supplies from the local farmers and whose products are consumed by the locals. This being the case, we believe that our business cannot thrive outside the wellbeing of the community in which we operate. We have three community support programmes that impact and bring positive changes to the lives of millions of Tanzanians which include;

• Water of Life: Since 2010 SBL has undertaken several water projects across the country benefitting millions of Tanzanians by providing them with free clean and safe water.

• Skills for Life: SBL provides fully funded scholarships to 30 students from our farming communities every year to study agri-related diploma courses in local colleges with the aim of building technical capacities for the farmers.

• Responsible Drinking: Every year, in partnership with the police the company reaches out to thousands of its customers and the general public including drivers, college students, bodaboda riders, bus drivers and pedestrians with Don’t Drink and Drive message. This, according to the police has contributed to improving road safety.

• Agribusiness: This refers to the programme to develop and empower a network of local farmers from whom the company sources the grains for beer production. Some 400 farmers are currently benefitting from the programme in 8 regions.

• Tree Planting: recognizing the importance to conserve water catchment areas, SBL plants thousands of trees every year in contributing to increase Tanzania’s natural vegetation cover.

Q. Tanzania is a land blessed by beautiful landscapes, one of the most welcoming people in the world and a huge growth potential. • What makes you and your company be proud of being Tanzanian?

A. we take pride of our diversity – both geographical and ethnicity but which are strongly webbed together into harmonious co-existence made possible through Kiswahili language. This is a heritage we should all jealously conserve and protect. Nothing can thrive, not even our business outside of peaceful environment.

Q. President Magufuli has emphasized the need for foreign investments in the state to drive economic development while implementing Tanzania’s 2025 Vision to become a semi-industrialized country.

• Why is now the best time to invest in Tanzania? As a country we have managed our macro-economics well for more than a decade which lays solid ground to attract foreign investment.

The market is growing and the business environment can only get better. So to fellow foreign investors we say, Karibuni Tanzania!

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Author: Business Standard Reporter

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