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London - Brewer SABMiller is to spend over $100m to build a new brewery in Africa's second-largest beer market Nigeria, in an effort to take on the country's brewing heavyweights Heineken and Diageo.
Africa's biggest brewer said on Tuesday it will build its new brewery on a greenfield site at Onitsha in southeast Nigeria, to expand its presence in the country after buying small beermaker Pabod Breweries in 2009.
Nigeria's annual beer market of about 18 million hectolitres is second only to South Africa on the continent. It is dominated by Heineken, with a market share of about 70%, and Diageo's Guinness business with over 20%, leaving SABMiller a share of less than 5%.
The fast-growing Nigerian beer market has expanded at an annual rate of 9% in the last 10 years. Heineken acquired controlling interests in five breweries in January to expand its capacity there by nearly a third.
SABMiller's new brewery will produce local brands Grand Lager and Eagle as well as Castle Milk Stout. It will have an annual capacity of around 500 000 hectolitres of beer and malt beverages, and be able to bottle water and other beverages.
SABMiller Africa - of which SABMiller owns 62%, with the rest held by privately-owned drinks group Castel - will own 80% of the new business, with the Anambra state government and other Nigerian investors holding up to 20%.