When beverage giants Diageo and Heineken wanted to gain a foothold in the South African brewery market, they chose Namibia as their starting point. Last year they bought a 28.9% stake in Namibia Breweries (Nambrew) with each company owning 50% of this stake. Together, they intend to combine the strengths of all three companies in a joint venture to challenge the regional dominance of SABMiller.
SABMiller has a near monopoly, with more than 98% of South Africa’s beer market. Despite its dominance, though, Nambrew has a foothold in the South African premium market with its leading beer, Windhoek, commanding 30% of that segment, and Heineken has already started to brew its famous green labelled beer in Namibia for export to South Africa.
“They bought a minority stake in Namibia Breweries to use it as jump-board into the South African market. The joint venture has led to the transfer of skills and brought a new work culture to the country and to Nambrew,” says Sven Thierne, managing director of Ohlthaver & List Group, majority shareholder in Nambrew, based in Windhoek, Namibia. “Heineken and Diageo have high awareness of programmes attached to AIDS with employee programmes on treatment and education.”
Nambrew and associated operations, such as water bottling and dairy, form the largest part of the Ohlthaver & List portfolio of companies. Mr Thierne considers this part of the company important because it represents a value-added sector that includes innovative products that are exported across the region. About 55% of products from this part of Ohlthaver & List are exported regionally.
Other parts of the portfolio include food (for example, fish processing), property, tourism, services and retail. Retail, according to Mr Thierne, is the fastest growing sector. Later this year, the holding company plans to open the first shared service centre in Namibia, which will shake up back-office operations across the country.
Mr Thierne believes there is huge potential for future foreign investment ventures, although he emphasises that any project “must be for the good of Namibia” and create good jobs for its people.
As the head of a company operating in Namibia for the past 80 years and whose business accounts for 5% of the country’s GDP and employs about 4000 people, he believes Namibia has a good business environment for foreign investors. “It has political stability and is a working democracy. There is a normal Western way of doing business and it is extremely investor friendly, particularly if you look at the conditions in, for example, the export processing zones.
“The government is responsible with its assets and works with companies for the benefit of the country. The peg to the South African rand also adds strength and stability to a strong economy,” he says.
However, he admits that, due to the country’s net export of foreign currency, there is still a problem with raising capital inside the country. Nevertheless, the longevity of Ohlthaver & List – an organic company, exporting around the region and forming ventures with international giants – proves that Namibia’s business environment works.