Brasseries: UCB to boost its capabilities

The brewer of Kadji group which is undergoing restructuring process wants to move up a gear in order to boost its capabilities.

This comes after it increased its capital, investing in new equipment.
The Petit Poucet of the brewing industry of Cameroon is determined to go on the offensive.

In recent months, the Cameroon breweries Union (UCB) has continued to increase efforts in this direction. Recently, it was a capital increase from 2.9 billion FCFA to 25 billion FCFA (€ 38.1 million).

Earlier this year, UCB took advantage of tax and customs benefits under a 2013 law on investment incentives to launch a project amounting to 9.6 billion FCFA : the installation of a second bottling line capable of producing 36,000 bottles per hour at its factory in the industrial zone of Bassa, Douala.

This project represents the first step in a 20 billion FCFA investment program approved in 2013, which also provides for the construction of two production plants in Yaounde (36 000 bph) and Bafoussam (25,000 per hour).

This should complete the restructuring of the Cameroonian brewer, which saw a downward spiral during the first decade of the XXI century. The company which was headed by Gilbert Kadji, one of the founder's son (Joseph Defosso Kadji) UCB has struggled to maintain itself on a market dominated by Brasseries du Cameroon (SABC group Castel) and Guinness (Diageo ).

Having long stagnated around 8% market share, the flagship of Kadji group saw sales melt over time. In 2008 for example, those beers declined by over 16% and soft drinks by 14%. And the launch of Madiba source of water was not a success.

To make matters worse, the policy of the company's human resources, bleak, resulted in a significant turnover. Something to be nostalgic of the early 1990s when, enjoying the confidence of some Cameroonians against French products in a context of challenging the Biya regime and pulling the nationalist fiber, UCB managed to reach nearly 30% market share.

"Winning cocks"

In 2010, with the arrival at the head of Ajewole Ikeola Adebayo, that this spiral was halted. Under the leadership of Nigerian, a restructuring plan was put in place, focusing on direct distribution with the strengthening of its fleet and its presence in retail outlets.

More than anything, the new boss reactivated aggressive campaigns on the "winning capsules" that can win free bottles.

The first good results are quick; sales of the King Beer and Kadji beer took off. The market share of its beers increased from 3.5% to over 6% between 2010 and 2014.

"The focus on product quality, a long overlooked aspect by the previous management, was largely behind this renewed interest of consumers," according to an industry expert.

Despite the expansion of the "Special" range and the introduction of plastic bottles, the soft drinks did not follow the same path. Their share declined - from 2.3% to 0.8% between 2011 and 2014 - in this very competitive segment, which has now seen to Nana Bouba Beverage Company (Nabco).

"This is the segment that has the highest innovation with the creation of new fragrances. In addition, consumers now prefer natural and fruit juices. These are developments that the company has not taken into account," said our analyst.

JOSEPH KADJI DEFOSSO, NOT VERY FAR

Even though Kadji Defosso Joseph, 91 years, is officially not involved, he continues to keep an eye on his business. In 2013, he validated the investment program to increase capacity at UBC.

In May, as a partner, he was at the forefront during the inauguration of Kadji Square, the Super U supermarket that was opened in Douala.

To restart the UCB, which he founded in 1972, this native of Bana (in Bamileke country) - of which he is the CPDM baron (ruling party) - took the decision in 2010 to remove his son, Gilbert, as operational manager.

But his daughter Nicole remains his "woman of confidence" in the main subsidiary of the group Kadji, whose borders extend to insurance, hospitality, at the mill, transit, marine, sport, and distribution.