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India's UB to quit South Africa
BANGALORE, India -- Indian beverage giant UB Group has decided to quit the South African market by selling its United National Breweries (UNB), according to a report. A sharp fall in the value of the South African currency, the rand, along with reduced consumption of sorghum beer is behind the decision, the Economic Times reported Wednesday. The rand has fallen from a high of 3.6 to the U.S. dollar in the mid-1990s to about 7.85 now. In December 2001 it slumped to a record low of 13.9. The UB Group, which is based in Bangalore, has about 40 percent of the Indian beer and liquor market and also has joint ventures with brands such as Carlsberg. Along with its beer and spirits business, it operates in pharmaceuticals, IT, paint and coating products, and hotels and resorts. Global revenue is about $1 billion a year. The Economic Times newspaper said the UB Group had appointed advisers to prepare for a sale of UNB. An earlier plan to retain a 50 percent stake and management control did not come to fruition, according to the report. UNB has annual sales of about $70 million and is said to be making an operating profit. The UB Group initially invested $15 million in the mid-1990s to buy a 30 percent stake in National Sorghum Breweries (NSB), and later moved to full control. NSB, which was then the largest producer of sorghum beer in South Africa, changed its name later to UNB. UB holds 75 percent of UNB and has placed the rest with Marriott Merchant Bank, as South African law does not allow an overseas company to own 100 percent stake of a local entity. According to the Economic Times, UB officials say that while the group would like to quit UNB completely, it is open to other options.
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