MASERU — The global financial crisis might be biting hard but this has not stopped Basotho from quenching their thirst in style.
Money might be tight but they still make merry.
Take for instance the six months to September 31. Basotho drank more beer and fizzy drinks than they did in the same period last year.
That gigantic national thirst helped boost Lesotho Brewing Company’s profits in the past six months by 8.2 percent. Lesotho Brewing Company is the brewer of Maluti, Castle and most of the lager brands consumed in the country.
In an interview with the Sunday Express last week, LBC managing director Anthony Grendon said the increase was more than double the company’s projected target of four percent for all three businesses — Maluti Mountain Brewery, Lesotho Liquor Distributors and Marotholi.
“Despite the depressed economic indicators, we have seen positive signs in our sales of over eight percent and growth ahead of our own targets in the region of four percent,” Grendon said.
He said their business was underpinned by four different strategies.
“Our business is dependant on four strategies which are: a full brand and pack portfolio offering; winning the battle at the point of purchase; protecting our trading position by nurturing relationships through responsible drinking and ensuring our organisation has access to high quality human and material resources.”
Grendon said they had three mainstream brands — Hansa, Carling and Castle. The second tier is the semi-premium category, which includes Maluti and Castle Lite while the super-premium category — their third category — includes brands such as Miller, Peroni, among others.
“The mainstream category covers about 90 percent of our businesses, followed by the semi-premium category with about seven percent.”
Interestingly though, compared to last year, there has been a substantial increase in sales of the semi-premium category which, according to Grendon, indicates there is a shift in consumption habits among consumers.
“However, our bread and butter remains the mainstream and we will always try to protect it.”
Among some of the major challenges the company faces, Grendon said, are increases in input costs and cash-flow problems.
“We have seen an increase in the price of sugar and barley, which has affected our bottom line significantly. High fuel costs have also impacted negatively on our business.”
Grendon, meanwhile, feels one of the challenges facing big corporations is “green sustainability.”
“The environment in which we operate should be better-off for our presence and our operations should not have a negative impact on the environment. For example, our company is to invest in a water reticulation plant in conjunction with the Water and Sewerage Authority to ensure water disposed of by the company is treated before being released into the river system.”
In addition, LBC is also looking at innovative ways of reducing the use of power in their operations, according to Grendon.
In another development, LBC has struck a deal which will see the company buying sorghum from Basotho farmers in Berea, Leribe, Maseru and Mafeteng.
“We have signed contracts with farmers and we will be buying sorghum from them for our pilot brand, once harvesting has been carried out next year,” he said.
Grendon also said the company commissioned a US$6.5 million (about M48.49 million) bottle washing machine in September.
“We are also planning to build a new brewing house worth US$10 million (M74.6 million), which will be a three-year project,” he said.
He told the Sunday Express the company was investing in the community through initiatives such as “Kick Start”, where young, promising entrepreneurs are supported financially and trained to help them develop their businesses.
“We train retailers in business skills and basic business principles, which will help them run their businesses more efficiently,” he added.
Grendon emphasised the need to observe sound business practises at all times.
“We must be seen as a responsible organisation by ensuring our behaviour is, at all times, above reproach. We are not a faceless organisation; we enjoy meeting with relevant authorities to present the way we conduct our business.”
The company currently has a staff-complement of about 300 people with six depots operating throughout the country.