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We’ve created appetite for quality beer

By Patrick Kagenda

Jerry Rajwayi is the General Manager at Parambot Breweries. He spoke to The Independent’s Patrick Kagenda

How do you start your day?

I’m an early raiser from childhood. I come from a farming family and I used to milk cows in the morning before going to school. I have kept that. I have no cow to milk here, so I spend my early morning catching up with news, mainly on TV. Three times in a week I jog in the morning to refresh myself. I also read a lot in the morning before I set off to office. Usually by 8.00 am I am at office.

What challenges do you face?

They are immense and not unique to Parambot Breweries Ltd but common with any new player making a foray into a strong market. One of our biggest is getting our raw material for brewing which is malt. We have no local source and have to import from Europe. The ex-works price of malt is cheaper than any local raw material here in terms of unit cost against yield and product quality. However, the cost of freight particularly by road from the port of Mombasa to Kampala makes nonsense the whole business logic of importing malt. This is likely to even go higher with new axle load limit regulations which have been introduced to ensure longevity of our roads. There is very urgent need to fastrack the development of an efficient railway system to link Kampala and the Port. The world has opened up and consumers are much informed, they are not looking for local content to buy but quality products. We can only develop locally if we start by integrating with imported raw material not locally available. This will grow the industry and benefit a lot of people. Cost of energy is very high, fuel oil, diesel and Umeme and these remain a major factor of production. The other main challenge we are facing is in distribution mainly in regards to reaching our products to all corners of the country to serve our loyal customers. Cost of fuel is high and roads very poor.

How are you resolving these challenges?

These challenges are not confined to us but the general business community and particularly the manufacturing sector. We are constantly reminding ourselves as private sector that everything needs to be done to improve connection of Kampala to the Port of Mombasa. We are aware of the work going on in the RVR concession, but the process is too slow and we are not sure if this will address our transportation issues adequately. On the local front, more needs to be done to improve the general road infrastructure to cut costs of vehicle maintenance. Internally, at PBL we are working on systems that improve efficiency especially in the area of energy wastage in production. We are also educating our staff on the need to conserve energy as an environmental concern.

How are you dealing with the growing stiff competition in the beer industry?

The competition is not only on beers but the entire beverage sub-sector is very active here including water. We are committed to creating a new experience in the beer market by focusing on quality of raw ingredients used in brewing. I think it’s now very common to hear adverts about beer extolling the true quality offering to the consumer which are real and factual, not the old empty and clever marketing statements. You have also seen the response in the market with regards to sugar free beer. Some brands are now being imported into this market to ride on the positive perception of sugar free beer which we have been able to create with our flagship brand Moonberg Lager. I’m very happy that our brands have excited the market and promise not to disappoint our quality conscious/loving consumers. This remains our relevance, and guiding principal in our drive to grow.

EABL recently acquired Serengeti breweries in Tanzania, does this have any bearing on the Ugandan beer market in general and Parambot Breweries in particular?

This has a lot of bearing on the Ugandan market and on us in particular. The bearing is positive. We have opened the appetite for quality beer in Uganda and it’s a good opportunity for those with established systems/business to tap on. Other than Serengeti beer selling in Uganda, the move by EABL to re-establish itself in Tanzania is expected to change the landscape in beer industry in the region. We are at the moment a small player, we are watching and hope to benefit from the tussle between the giants so to speak.

What’s the impact of EAC common on Parambot breweries?

The current protocol on free movement of labor and capital will only be felt gradually but it’s a welcome development in the region. The earlier protocol on traffic structure had more instant impact like the introduction of the Rule of Origin since this meant certain goods immediately had certain taxes lowered. The greatest benefit we hope to get from the EAC is the larger market and hence a more vibrant regional economy of 120 million people plus. The harmonisation of the customs tariffs in the region if finally achieved will also help balance the benefit. But I think the impact is long range to be felt five years plus.

What new innovations are coming at Parambot Breweries?

We have introduced new beer brands which are made using mainly local raw material. This is targeting our consumers in the bracket that cannot afford the more premium Moonberg. The brand NYOTA Lager has been made so carefully you could easily take it for the mainstream market, but we have offered it at a modest price to benefit the target market.

What is your style to management and who are your mentors to successful management practices?

I’m self-made with no mentor but I admire Sir (Richard) Branson and his Virgin World companies.

 

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