xxx SABMiller Africa Enterprise Development: A Partnership in Innovation with Smallholder Farmers Driving value and competitive advantage through localisation of our supply chain AgriBusiness Forum 2011 Johannesburg, October 2011
So what’s new ?
New approach to the commercialisation of cassava: new mobile technology set to revolutionise the cassava industry in Africa and add substantially to economic and rural development
” Hub & Spoke” farm model: allows inclusion of commercial and smallholder farming in a symbiotic relationship leading to sustainable development of smallholder farmers
Novel brewing technology to produce a clear good tasting lager beer using cassava as the main ingredient, allowing access to new beer growth markets
New-style 3-way public-private partnerships (Government-private enterprise-NGO/donor organisation) creating a real ”win-win-win” relationship driving agricultural development in Africa
Potential cassava starch yield 2-3 x equivalent maize yield with lower input costs and risks
Cassava derived starch very competitive with other adjunct derivatives – approx 15-20 % cheaper than the nearest competitors - further opportunities driven by yield productivity and ownership of the value chain.
Cost of Producing Starch from Cassava* * 20 t per ha yield
Just under 60 % of cassava fair price influenced by cost
Based on success in other Sub-Saharan African countries, SABMiller, the parent Company of Cervejas de Mocambique (CDM), is engaged in a local sourcing initiative to stimulate agriculture in Mozambique.
The project utilises recent breakthroughs in brewing techniques to enable SABMiller to produce clear beer replacing traditionally imported malted barley with locally grown cassava.
The project is based on reducing the price of the beer produced from locally grown cassava to ensure that the product is affordable to a much wider section of society thereby creating a product with sufficient demand to commercialise the underlying crops .
CDM is investing in the development of a new commercial cassava industry in the country, in order to produce and market a new range of quality affordable lager beer products in a sustainable and financially viable manner.
Cassava is not generally used in lager beer brewing, but a prototype lager beer (Brand ‘X’) has been developed as a result of our own in-house product development program, in which it substitutes in part for imported barley malt to produce a quality product. This will be the first commercially produced cassava based lager beer in our African portfolio, and the learning’s will be used to roll out the product to our other African businesses.
The Mocambique Government has indicated strong support for the initiative by levelling the playing field and approving a “favourable” excise regime for the new category at the 10 % ad valorem rate (25 % of mainstream beer excise @ 40 %) .
With this lower-than-beer excise rate the intention is to produce a more affordable clear lager in Moçambique from locally grown and processed cassava and is expected to retail at about 70 % of the price of a “mainstream” beer. At this price level it will appeal to consumers currently consuming various forms of “affordable alcohol” (including “cheap” liquor, illegal - and often non-excised - spirits and dubious quality home-brews), and will constitute an aspirational purchase.
As such the brand is expected to generate in excess of 660 000 hl pa of new beer volumes over the next 5 years (30 % of our brand portfolio).
Some dimensions of the project
Will create a demand for over 45 000 tpa cassava root