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SAB and AB INBEV report on first year of public interest commitments

Johannesburg, South Africa, April 23, 2018- In the first year of its Public Interest Commitments (PIC) agreement, South African Breweries (SAB) made key investments in Agriculture, Enterprise Development and Societal Benefit programmes in South Africa. Of the total R1-billion fund investment commitment over a five-year period, SAB committed a total of R209-million in 2017 into projects within the three focus areas.

The first year achievements of the PIC were announced today at Lukhanyo High School in the community of Mohlakeng, approximately 45km west of Johannesburg. The community of Mohlakeng is one of the beneficiaries of the PIC agreements through the construction of a sports court at Lukhanyo High School. SAB has partnered with The Sports Trust Fund to deliver quality, safe, sustainable sports infrastructure that are located at needy schools and accessible to the community at large. The multi-sports court is one of the first to be erected with further facilities to be constructed this year as per the PIC agreement.          

The Public Investment Commitments were agreed on with the South African government at the time of the integration between SABMiller and AB InBev at the end of 2016 and endorsed by the South African Competition Tribunal. The aim of the investment is to bring economic and broader societal benefits to South Africans over a period of five years.

The investment fund is managed by an Implementation Board with equal representation from government and AB InBev to help establish and maximise the impact of projects developed.

“We believe in the future of South Africa, and we know that investments by companies such as ours can be truly transformative in changing individual and community lives. Our significant footprint in the South African economy and our extensive value chain mean we have a unique opportunity to leverage what we already do best. We are committed to help change the face of South Africa’s economic demographic through the smart development of our suppliers and of entrepreneurs in the wider economy. We are also in a position to support emerging farmers, enhancing the hops and barley sectors and playing a part in building the skills we need for food security,” says Ricardo Tadeu, Zone President SAB and AB InBev Africa. 

A substantial portion of the R1-billion AB InBev investment fund is allocated to Agriculture – 61% or R610-million over five years. This will drive SAB’s efforts to support new emerging farmers and towards growing the South African agricultural sector to become a net exporter of barley and hops.

“We consider Agriculture to be the area of the greatest opportunity for economic renewal and impact and we will seek to use as many local materials as possible to brew our beers. We believe this will help achieve governments’ ambition to deepen the industrialisation of South Africa and create employment, especially among the youth,” says Tadeu. 

The PIC agreement has the intent to create 2 600 jobs in the Agriculture sector. SAB has expanded this commitment to create 10 000 jobs across sectors, primarily through entrepreneurship, over a period of five years.

Five-year commitment in Agriculture:
·         Increase new emerging farmers by 800
·         Increase new commercial farmers by 20
·         Expand annual barley production to 475 000 tonnes
·         Strategic intent to create 2 600 new jobs
·         SA to become a net exporter of 10 tonnes of hops and 65 000 tonnes of malt
·         Invest in and utilise SA Research and Development and Technology to benefit emerging and commercial farmers
·         Create new business opportunities in the Agriculture sector

In 2017, the focus was on investment in research and development; the establishment of an Agriculture Task Team aimed at delivering value and facilitating alignment with government stakeholders, including the Department of Agriculture; and the establishment of Farmsol, an emerging grower development implementation partner for SAB and the agricultural industry. Other focus areas included the integration of SAB’s existing emerging grower programmes, Women in Maize and Go Farming; and the development of a Model Farm pilot in Caledon to establish best farming practices which can be replicated across the farming sector.

The total spend in 2017 on Agriculture was R117-million.

A total of R200-million has been committed to enterprise development over five years and focuses on building sustainable enterprises within the communities in which we work, with the vision of developing opportunities for young people to enter the economy and to provide them with skills training.

Five-year commitment in Enterprise Development:
·         Establish a dedicated business incubator facility
·         Provide new and existing suppliers as well as entrepreneurs with business training
·         Employ 10 dedicated business coaches and 10 engineers to support the supplier and entrepreneur programmes
·         Provide an online interactive training course for suppliers and entrepreneurs
·         Assist supplier transformation to black-ownership

In 2017, our enterprise investment focused on growing SAB’s local supply chain and transforming small businesses. A total of R67-million was invested in enterprise development initiatives which included the launch of a business incubator, the SAB Accelerator, a dedicated programme focused on developing black-owned and black women-owned suppliers and content development for online entrepreneurship training programmes through SAB KickStart. In addition, ownership transformation of businesses in our supply chain was undertaken through the SAB Thrive Fund, and in 2017, through the SAB Thrive Fund, the first black woman hops farm-owner in George was established.

The final tranche of R190-million of the R1-billion fund is earmarked for societal benefits.

Five-year investment in Societal Benefits:
·         Support and develop alternative energy use in SAB operations
·         Support education and the use of alternative energy within SA communities
·       Promote a sustainability programme aimed at reducing waste, encouraging recycling and preserving water
·         Enhance current youth sports programmes and establish afterschool educational initiatives
·         Fund 40 engineering and agronomy scholarships
·         Sponsor an additional 200 learnerships for those who have no formal education and the unemployed

In 2017, the total spend on societal benefits was R25-million.

In addition to these three areas of focus and outside of the PIC investment, using SAB funding of more than R133-million in 2017, SAB has supported programmes to reduce the harmful use of alcohol, especially among the young.

Some of the harm reduction initiatives in 2017 included the SAB 18+ Be the Mentor campaign, a call to action for adults to become role models in the fight against underage drinking, and the launch of the SAB Smart Drinking Squad to educate and empower licenced tavern owners, their patrons and local communities to use alcohol responsibly. Other initiatives included investing R40-million in tavern upgrades in Western Cape, Kwa-Zulu Natal and Gauteng to enhance safety; the SAB Smart Trader Programme to educate retailers on smart trading and compliance; the launch of an alcohol-free beer, Castle Free; and the launch of Carling Black Label’s #NoExcuse campaign to address gender-based violence.

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