East African Breweries Limited (EABL) has announced that it has paid a combined Ksh. 64 billion in taxes to countries it operates in.
This development was conveyed to shareholders by it board chairman, Charles Muchene at this year’s Annual General Meeting.
Mr Muchene told the shareholders that the only indeterminable factor likely to affect the company in the coming years is the political and socio-economic environment in the region.
“We have seen the business make significant progress over the last four or so years and it is in a good place to face the future as we approach our centenary celebrations. That future brings with it many possibilities and we cannot afford to sit on our laurels,” said Mr Muchene.
Established in 1922, EABL will be celebrating 100 years of existence in 2022, and Mr Muchene said the company would remain “cautiously optimistic” that the business environment would continue to be good in the future.
“We have a clear strategy, which we rebooted three years ago, and are executing it relentlessly, with the only imponderable being the political/economic/social environment we shall undertake business in as this is outside our control,” Mr Muchene added.
EABL Managing Director Andrew Cowan attributed the company’s improved fortunes in the past financial year to higher sales, which saw revenues rise 12 percent to Kshs 83 billion, compared to the last financial year.
“This has been the strongest performance for many years,” Mr Cowan told the shareholders. “When we operate in a stable and predictable environment, we not only benefit as a business but contribute more to the Exchequers across the region.”
Mr Cowan said the company would now look to commercialise the new brewery in Kisumu to produce one million hectoliters of Senator Keg per year, whose increased distribution would create 100,000 jobs in the western region.
The company will also look to increase the consumption of mainstream spirits despite the increase in Excise Duty that recently forced alcohol beverage manufacturers to increase the price of their products.
The annual increase in Excise Duty comes with the risk of low-end consumers resorting to illicit alcohol as the prices of legitimate alternatives increase. With up to 50 per cent of alcohol consumed in Kenya sold through informal channels, the company is also keen to recruiting from illicit alcohol, mainly with its iconic Senator keg brand, for which it recently invested Kshs 14 billion to build a new brewery in Kisumu.
EABL introduced Senator Keg in 2004, made using locally-grown sorghum, and its consumption has increased over the years. In the last financial year alone, consumption of the drink popular with the lower end of the market increased by 32 per cent. Rising demand for Senator Keg has resulted in the company increasing the number of sorghum farmers to 62,000, earning Kshs 1.2 billion during the period.
Mr Muchene said that investments made by the company over the past five years have resulted in an increase in the proportion of locally-sourced raw materials from 20 per cent to 80 per cent over that period.
Shareholders also approved the pay-out of a final dividend of Ksh. 6 per share, taking the total dividend to Sh8.50 per share, Sh1 more than the pay-out the previous year.
East African Breweries Limited (EABL) is a regional leader in beverage alcohol. The company operates in Kenya, Uganda and Tanzania and its products are sold in more than 10 countries across Africa and beyond. It brands Tusker, Guinness, Bell Lager, Serengeti Premium Lager, Kenya Cane, Chrome Vodka, Johnnie Walker, Captain Morgan and Smirnoff.