Procurement savings boost SABMiller results

23 November 2012

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24 November 2012 | Anna Reynolds

Global brewer SABMiller has generated $115 million (£72 million) in savings by streamlining its finance, HR and procurement functions, according to its 2012 interim results.

The company has also implemented distribution and supply chain management systems and set up a global procurement business called Trinity to establish group-wide buying deals for materials used by all of the companies businesses. The cost of the changes was $70 million (£44 million), but $115 million (£72 million) has been generated through more effective procurement.

The report revealed raw material input costs rose as a result of higher cereal costs, but these were offset by procurement and other savings, resulting in a group revenue of $1.75 billion (£1.09 billion) in the six month period from April to September 2012. This was a rise of 11 per cent on last year’s figure.

Commenting on the results Graham Mackay, executive chairman of SABMiller, said in a statement: “Margins have risen modestly despite higher input costs, as a result of our cost reduction and procurement initiatives supplemented by a positive contribution from the acquisitions and business combinations concluded in the second half of last year.”

The company said it is continuing to invest, particularly in Africa where lager volumes grew by 5 per cent due to significant market growth in Ghana and Mozambique.

Additional brewing capacity was commissioned in South Sudan and Nigeria during the past six months and new projects in Ghana, Tanzania, Peru, Uganda and Zambia are currently under construction.

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