By Amin Kef Sesay
The Sierra Leone Brewery Limited (SLBL) has on the 28th July 2021 held its 58th Annual General Meeting via Zoom. The Chairman of the Annual General Meeting, Jan-Kees Nieman, in his address to the shareholders of the company, welcomed all the participants further stating that due to the COVID-19 pandemic for the second time now in the company’s 59 year of history they are once more holding the AGM virtually on-line.
He informed participants that he will be presenting the Annual Report and Financial Statements of the company for the year ending 31st December, 2020.
Dilating on the business environment, the Chairman highlighted that the year 2020 was characterized by lower volume sold in the domestic market compared to previous years due to the global pandemic that was declared in March 2020. He underscored that the business environment in 2020 was challenging in terms of currency depreciation, 13.1% inflation, 13.4% and high money market rate of 8.0% which translated into high cost of running business.
Jan-Kees Nieman furthered that the excise duties on imported alcoholic beverages that were significantly lowered in 2018 were maintained at that level and continue to have negative impact on the competitiveness of their locally produced products.
“This affected our performance and the business case we had made for our large investments in the previous years,” the Chairman also intimated.
Touching on the company’s 2020 operating results, Jan-Kees Nieman revealed how SLBL delivered a positive business performance despite the challenging business conditions triggered by the COVID-19 pandemic. He disclosed that net revenue grew by 10.4% from Le160.0 billion in 2019 to Le 176.6 billion in 2020 also stating how the revenue growth was driven by the export market development with sales of Heineken beer and Desperados brands in Liberia and Guinea.
The Chairman also informed that the operating result deteriorated from Le6 billion profit in 2019 to Le 6.1 billion loss in 2020 stating how that was mainly as a result of restrictions put in place by the authorities to stop the spread of the COVID-19 pandemic in 2020.
“The Net Financing cost increased from Le35.4 billion in 2019 to Le 60.1 billion in 2020 primarily driven by the exchange losses as the Leone depreciated continuously,” the Chairman added explaining that as a result the net loss increased from a loss of Le29.5 billion in 2019 to a loss of Le66.2billion in 2020.
The Chairman said in quarter one of 2020, the Brewery went on with its investment programme and commissioned an additional
four new Bright Beer Tanks each with a capacity of 700hl valued at 20 billion Leone meant to replace the old tanks and to improve the quality of their products stating that total investments in the Brewery and the company now amounts to 310 billion Leones in the last 4 years.
He maintained that their supply chain operations was affected by several disruptions at the height of the COVID-19 pandemic with
significant dislocation in supplies of spare parts, raw and packaging materials both locally and imported.
“Our local sourcing agenda continued to be a key strategic objective in 2020,” he stated adding how throughout the year, SLBL worked
closely with local farmers to grow sorghum for use as a raw material in their production.
The Chairman said, however, they suffered from the effects of COVID-19 movement restrictions especially during cultivation period (May-June) which, according to him, grossly affected the cultivation of sorghum crop of 2020.
He expressed their commitment to increase sorghum availability
in the light of the Finance Act, by the use of higher yielding seed varieties, increase in area cultivated and through larger semi-commercial farms and mechanized commercial farmers.
With regards sales and export, Jan-Kees Nieman, said 2020 was a special year, full of challenges and many surprises revealing how their sales team navigated the crisis by providing the necessary support to their customers and consumers at the point of consumption.
“Our Export sales to Liberia and Guinea represent 9% of our total volume and revenue,” he stated disclosing how they sold 12,000 HL to those markets which helped them grow their Revenue by Le. 16.8 billion.
The Chairman mentioned how they creatively executed some marketing activities in the midst of the COVI-19 restrictions, navigating the crisis
with the right communication to support growth whilst embedding social responsibility in brands.
He said even though the effect of the COVID-19 pandemic affected businesses and economies globally, SLBL continued to play an important role in the social and economic growth of Sierra Leone, through the company’s investment and growth strategy, job creation and their extensive corporate social responsibility agenda supported by
HEINEKEN Africa Foundation (HAF).
He revealed how SLBL executed a sorghum awareness campaign across various districts to develop, galvanize and attract more farmers to go into sorghum cultivation for commercial purposes, in order to meet the production requirements of SLBL as part of their local content commitment.
“We completed the remaining three out of seven solar powered wells across locations in Koya Town and Wellington Industrial Estate,” he stated adding how it was a HAF sponsored project on the implementation of seven submersible solar powered wells to provide clean accessible water for residents.
The Chairman said the project now benefits thousands of residents in those communities.
The Chairman said under the sponsorship of HAF, they did a signing ceremony and launched a project for over 2.3 billion Leones on
the 31st August 2020 in partnership with World Vision International to provide water and sanitation assistance in specific areas in the Western Area during COVID-19.
He also said there was no movement or change in the Board of Directors as all continued to perform their duties accordingly and performed the usual advisory, governance and strategic duties as
required.
He said the Directors to retire by rotation during the Annual General Meeting, in line with the provisions of Articles 106 of their Articles of Association, are Ivan D. A. Carrol and L.J. Tani Pratt furthering that in accordance with Article 108, being eligible, they offer themselves for re-election adding how motions for that will be put to the shareholders during the course of the proceedings.
Talking about 2021 and beyond he said the Board of Directors believes that the improvements and investments in 2020 will have a further positive impact in 2021 and beyond.
He said in 2021 they hope to recover from the negative impact of the COVID-19 pandemic although the risks are still high for the business locally as well as globally.
“We will roll out the Heineken “Evergreen” strategy with work streams looking at Growth, Cost and Value, Social Responsibility and Sustainability, People and Culture, Digital and Technology in 2021,” he expressed optimism adding that they will strive to continue to make positive impact in the development of Sierra Leone.
Dilating on their important initiatives, he said, they include their local sourcing particularly sorghum and expansion to other locally cultivated items such as barley.
He said with their Corporate Social Responsibility agenda, they will continue in 2021 working with communities to improve WASH facilities in the face of the continuing threat from the COVID- 19 pandemic.
“SLBL will remain a strong long-term reliable partner for the development of Sierra Leone and supporting national revenue strides,” he stated.
Prior to the commencement of the Annual General Meeting, the Company Secretary, Albert Ojo Collier readout the Notice of Meeting.
The meeting was climaxed with the presentation of a Financial Report by Bakertilly, an independent Auditing Firm, to the Shareholders of the Sierra Leone Brewery Company.
