The Business Year

Pedro Cruz

Managing Director, Cervejas de Moçambique (CDM)

Miguel A. Soto

Regional Manager, Southern African Emerging Markets (SAEM), Diageo

Local and multinational producers of alcoholic and non-alcoholic drinks look forward to growth in consumer spending and better regulation in the short term.

How is your commercial infrastructure set up within Mozambique, and what kind of products do you produce?

PEDRO CRUZ We have three breweries located in the main three cities of the country, namely Maputo, Beira, and Nampula, and a network of sales depots in each provincial capital. We have close to 1,400 employees, we produce approximately 2 million hectoliters of beer, and have a higher capacity installed than our current production output. We are producing at approximately three quarters of our capacity. The last plant we built was in Nampula, and while we have no plans to build new breweries, we do intend to expand our existing facilities. We intend to complete major extensions at all three of our breweries within the next three years, although this depends largely on how the market develops in each region. We produce approximately twenty brands including beer, alcoholic fruit beverages, wines, spirits and Chibuku, a traditional African beer with a lower alcoholic content, made from sorghum and maize, and known as an opaque beer in some areas.

MIGUEL A. SOTO Until July 2012, Diageo had no direct presence in the country. We have a long relationship with our distributor, CICOTI, which has a large portfolio and was providing us access and understanding of the market. I deployed in July 2012 and by January 2013, we knew this was the right place to be. We established a company in Mozambique and by August 2013 we had purchased Lusomoc Ltda, which was not performing at the time, changing the name to Diageo Supply Marracuene Limited (DSML). We immediately got all hands on deck to see how we could produce spirits in an affordable format to explore more opportunities in the mainstream spirits market, without compromising our values as a responsible producer of quality drinks. We started production in July 2014 through an innovative facility called “The Cube,” and launched two brands with three different formats. This is a plant shipped in containers, which is tested and then shipped to the destination and assembled. We offer Gilbey’s Gin, in 75cl and 25cl format, as well as a premium branded spirit, Master’s Choice in 20cl format. We then started producing Smirnoff Spin in late November 2014.

How have the sales of your products developed over recent years?

PC The biggest beer brand in the country is 2M, which is 50 years old this year. We consider 2M representative of Mozambican culture, being colorful, vibrant, and social. We also have Laurentina, with its different varieties, which turned 80 years old in 2013, making it the brand with the longest tradition in the country. Manica is also a major brand, with a strong presence throughout the country. In relation to the evolution of our sales, we have been successful over the many years that we have been present in Mozambique. CDM celebrates its 20th anniversary in 2015, and we have been growing consistently year after year and have made a positive impact on society, providing employment, expanding capacity, and investing in facilities, equipment, and in producing better products. We export the 2M, Laurentina, and Manica brands to South Africa and Portugal.

What demand is there for your products in Mozambique?

MAS The growth of mainstream spirits is limited by the large number of competitors selling in extremely small formats and exceptionally depressed prices. We believe that is unsustainable in terms of quality, in terms of consumer choice as well as legislation. We believe the market will formalize and diminish in size; however, it will increase in terms of quality and affordable quality choices. Our greatest challenge on imported spirits is the large amounts of product that flows in from different places, sometimes through the borders, and not paying the right taxes. We are working with the authorities on this because we believe that Mozambique is losing revenue and we, as a company, are missing the potential to invest and grow further and faster in Mozambique.



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