Rwanda to embrace new player in beverage industry

Bralirwa set to lose long standing monopoly in beer production Bralirwa S.A currently, Rwanda’s only and long standing producer of beverages for the last 50 years is set to lose its monopoly status with the entry of a second player. This move is bound to change the dynamics of the lucrative local beverages industry. A second beer manufacturer known as Brasserie des Mille Collines is set to launch operations before the end of this year. Sources say that this new player is associated with local business magnet Tribet Rujigiro. The new brewery plant according to sources is already underway. Jarry Gasasu a Director of Brasserie des Mille Collines did not want to divulge precise details of his company’s commercial launching but added that at the moment focus is on the establishment of the new company prior to its formal entry into the market. “I cannot give you further details of our entry programme at this very moment. As an entity that has been newly licensed to play in this market, we are organizing how we intend to make an entry. However very soon we are likely to make it known our intents”, Gasasu said. Officials at the Rwanda Development Board (RDB)’s Business Operations Services tasked with investment promotion said that the second beer plant was registered way back in 2005 with the then Rwanda Investment and Export Promotion Agency (RIEPA). RIEPA has since amalgamated into the RDB. At the time of its registration the planned investment was valued at $3.6 million. Sources within RDB indicate further that the new beer manufacturer had planned to employ 100 local people prior to launching of its operations. Clare Akamanzi the RDB Deputy CEO in charge of Business Operations Services termed the unfolding developments as a step in the right direction. She added that the development is bound to widen customer satisfaction locally. “Within Rwanda’s beer industry we have about three major companies having been at the moment registered with RDB. The largest being Bralirwa which is also one of the biggest tax payers,” Akamanzi said. Managing Director of Bralirwa, Sven Piedriet told Business Times that his company is set for competition. Competition comes just months after Bralirwa’s golden jubilee celebration in which the company spent almost $1 million in the ‘Guma Guma’ campaign. Bralirwa is already in preparation to counter the looming competition. The company’s top boss said that Bralirwa’s plans included considerations centered on taking advantage of its competitive advantages as a local beverage company. “Our plans are premised on selective niche market development using appropriate products existent within our huge family of offerings. In our expansion programme we are seriously considering taking Mutzig products to say Eastern DRC, Kampala, Eastern Tanzania and Southern Uganda,” he said. “Thus Bralirwa in certain aspects will want to take on the EABL directly but it will do so only in certain specific segments of the huge East African beer market. We will only venture in areas with unique opportunities for us”, he added. The Bralirwa commercial director Mr.Alexender Koch said that his company has a 95 percent market share of the Rwandan soft drink and beer market excluding water and juice. He added that Rwanda’s current per capita beer consumption is close to 9 litres per year. ‘This compares to 16 litres for Burundi, 11 litres for Kenya and 7 litres for Uganda. It is within this sort of dynamics that we are now preparing for a showdown with local and regional competitors”, Koch said. “The consumer will decide his choice of products and we will continue to maximize the consumer preference of our products. After our golden jubilee celebrations we will continue to activate our brands. Locally we will jealously take care of our backyard in order to use such strengths to forge a bridgehead to compete regionally,” he added. Bralirwa in a local show of might has continued to exhibit market presence as the festive season checks in. Following closely on the ‘Guma Guma’ promotion the company has moved to shore up its mutzig brand through an outdoor campaign dubbed ‘Mutzig Music’ tour which is scheduled to run to early October. Heineken the company’s other top tier brand has also seen its market presence boosted through sponsorships of various activities including a huge multifaceted corporate social responsibility initiative which will cost $850,000. These developments also coincide with the Initial Public Offer (IPO) of the Bralirwa shares that have been held by the Government of Rwanda. Government intends to offload it 25 percent shareholdings in Bralirwa to the public through the Rwandan bourse. The other external force likely to shape the dynamics of the local beverages market is the multi-national East African breweries Ltd (EABL), the largest beer manufacturer in the region. EABL has been closely eyeing the regional market with interests to extend products to Burundi and Eastern DRC. Mohammed Hassan, an independent consumer market researcher and regional analyst based in Nairobi said that, “However it is very likely to be an interesting cat and mouse encounter at the more larger regional level in which Bralirwa will not want to take head on the gigantic EABL”, he added. “Going for each other backyards will signal some kind of bare knuckles war between the three players Bralirwa and EABL at the local levels besides the entry of the third player who will most likely excite the market in which consumers are likely to be the main beneficiaries”, Hassan said. Ends

News

Rwanda to embrace new player in beverage industry