December 4, 2017 / 1:13 PM / a year ago

UPDATE 2-Heineken to open $100 mln brewery in Mozambique in 2019

(Adds Heineken official comment, background)

JOHANNESBURG, Dec 4 (Reuters) - Heineken began work on building a $100 million brewery in Mozambique on Monday, a high stakes gamble on an increase in beer consumption in one of the world’s poorest countries.

The factory, scheduled to produce its first batch of beers in the first half 2019, would give the world’s second-largest brewer a substantial presence in the southern African country, where annual beer consumption averages 11 litres per person.

The world’s major brewers have turned to emerging markets for growth because consumer spending in Europe is sluggish and the United States offers only limited expansion opportunities.

Mozambique’s economic growth prospects, along with its youthful population, were behind the decision to set up a plant there, said Boudewijn Haarsma, Heineken’s east and west Africa head. “Mozambique has a sizeable, young population. It has good, promising economic growth prospects,” Haarsma said in an interview with Reuters.

The factory will have a production capacity of 0.8 million hectolitres and is expected to create 200 jobs directly.

Mozambique discovered substantial offshore gas reserves seven ago. The find gives Mozambique an opportunity to transform itself from one of the world’s poorest countries into a middle-income state and a major global liquefied natural gas exporter.

Heineken, which also brews Amstel and Sagres, opened a marketing office in Mozambique last year, importing products to compete in a market where AB Inbev’s 2M is entrenched.

AB Inbev last year took over SABMiller, gaining a brewery in Mozambique among a host of assets worldwide.

Heineken built a brewery in neighbouring South Africa less than a decade ago after ending a deal with SABMiller for brewing Amstel beer. (Reporting by TJ Strydom and Tiisetso Motsoeneng; Editing by James Macharia and Keith Weir)

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