South African merger pays off
Corporation, two of the largest drinks producers in South Africa,
has helped Distell see improved growth opportunities and greater
international expansion.
The merger of Stellenbosch Farmers' Winery and Distillers Corporation, two of the largest drinks producers in South Africa, has lead to improved growth opportunities and greater international expansion, according to David Nurek, chairman of Distell, the company created by the merger.
The company saw its profits increase by over 33 per cent in the first half of the year to R277 million (€26m), a significant improvement on the decline of 8 per cent registered in the same period of 2001, directly as a result of the merger. The depreciation of the Rand also helped swell the figures.
"Our latest achievements confirm that Distell is now well placed to capture opportunities in international markets," said Nurek. "We are confident of continuing this satisfactory trend in earnings growth."
Although Distell is South Africa-based, the majority of its business is on international markets. Export sales, excluding those to the rest of Africa, rose by 37 per cent, with the group's wines registering a 33 per cent hike in revenues. A major marketing and promotional campaign behind the group's flagship cream liqueur brand, Amarula Cream, helped lift brand volumes by 14 per cent.
Total sales during the half year period were up 6.7 per cent to R4.9 billion, although volumes declined 5.3 per cent. "We now have a favourable sales mix thanks to focused marketing and sales initiatives which have placed greater emphasis on profitable products," said Nurek.
At home, Distell saw increases in sales of its key wine and spirit brands, although the recent launch of a number of copycat products impacted sales of flavoured alcoholic beverages.
