November 19 2018

Bralirwa to produce Heineken locally

Source: The New Times

Local Brewer Bralirwa Plc is set to launch the local production of Heineken beer, which was previously imported from the Netherlands.

With that, the brewer becomes the 9th subsidiary of the Heineken Group to produce the drink locally.

The brand will be produced in its Gisenyi Brewery.

By producing it locally, the firm is also seeking to execute a downward revision of retail price from current Rwf1000 to Rwf800. However, the drink’s bottles will now be returnable.

This, analysts say, could be a move to drive up sales of canned beer under the same brand as a section of the brand’s consumer prefer the disposable of the bottles.

Victor Madiela, the Managing Director of Bralirwa, said that they expect the development to improve their business prospects in Rwanda and increase their exports to the region.

“We believe that this innovation will create additional business opportunities for Bralirwa Plc and for our business partners in Rwanda as well as through export to neighbouring countries. Additionally, this is another contribution by Bralirwa plc to the Made-in-Rwanda programme. By switching from importing to local production, Bralirwa Plc will contribute to the development of the local economy,” Madiela said.

The firm registered a profit of Rwf2.1b in the first half of 2018 following total revenues of Rwf45.4b in the first half of 2018.

The firm, however, has been facing persistent challenges, including increased input costs which have continued to hold back its performance in recent years.

Madiela in August admitted to increased competition in the local market saying that they are seeking an edge.

The firm faces growing competition from Skol Brewery which has a range of beers and drinks.

Imports are also increasingly becoming popular in the local market coupled with refined consumer tastes in liqours further driving competition.

The firm’s revenue was this year adversely impacted by a one-off excise tax correction following a tax audit which by the Rwanda Revenue Authority discrepancy which revealed a discrepancy of about Rwf400m for the years 2015 to 2017.

The group’s recurrent operating costs were estimated at Rwf7 billion owing to higher input costs and brand investments.

The firm has in recent months introduced a strict cost management drive.