Local Sourcing Initiative

Local Raw Materials - cassavaAt the heart of our business is the need to innovate at scale to meet consumer demands. Every business seeks to maximize revenue and minimize cost whatever form it takes – be it forex or production cost. Guinness Ghana wanted to step up to develop local businesses, grow our reputation and move beyond the traditional corporate social responsibility. In the end, we would have created a sustainable value for every single point of the supply chain.

We set out to identify and develop appropriate local raw materials and engineer our brands to enable their use. To benefit from this initiative, local raw materials must compete advantageously against imported inputs in terms of value, price, quality and consistency in supply.

We sought opportunities we could leverage on, including our credibility with government and key stakeholders, the availability of these raw materials without endangering food security and the early successes chocked with Sorghum. There was also the Customs and Excise Act (2012) 855 which gave tax concessions based on a sliding scale of amount of local raw materials used in production.

With the passage of this law, GGBL had to invest and develop the capacity of our plants for these inputs, commercialize an accessible brand proposition that will cut into sales and sustainably engineer our existing brands to accept local substitute. Some of these raw materials also had no supply chain and thus had to develop it from scratch.

Following the successful passage of the Bill into an Act, GGBL birthed its first innovation, Ruut Extra Premium. Other brands such as Top Malt, Malta Guinness and Star have enjoyed the use of certain percentages of local raw material. The business continues to support local businesses through the creation of value chains for these inputs.

Currently, GGBL relies on three main locally sourced materials. These are Cassava, Maize and Sorghum. Cassava is the most readily available crop in Ghana and is a great adjunct in brewing. Maize is similarly good and yet not readily available like cassava. We are already ahead in the use of Sorghum as we have been developing the crop since 2003.

We believe that we can attain 70% raw material usage in our production by 2017 all things being the equal. This is a reason to believe – From June 2011 to June 2012, we used 12% of our local raw materials in production. Upon the passage of the Customs and Excise Act to June 2013, we increased local materials usage to 17%. By February 2014, local material use had shot up to 38%. Of this 13% was maize grits, sorghum was 23% and cassava starch formed 2%. This has reduced our dependence on foreign goods and hence reduced our forex exposure.

We are leading the front by developing a sustainable supply chain whiles achieving our commercial objectives.

It does not end at us though. Think about the income farmers are making, the guaranteed off-taker they get, the development of local business including revamping certain enterprises, the improved livelihood and the skills and knowledge transfer gained not to talk of revenue to government.

We are truly creating a sustainable value for all through the chain.