I knew I had only a few companies to consider in the East African region. My goal was to seek value in these companies.
Value, however, is subjective; each investor perceives it differently. To me, value was the obvious yet overlooked aspects. In fact, Buffett once said, “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
When I evaluated Bralirwa in Rwanda, I saw an opportunity to own one of the region’s largest brewers, with minimal competition in its area, plus licenses to produce Coca-Cola beverages. This potential was evident even before examining its financials. The company served a diverse clientele across age groups: alcohol consumers, non-alcohol consumers, children, and the elderly. This advantage wasn’t as clear with its biggest East African competitor, East African Breweries (EABL).
If given the chance to own any private business in Uganda, Century Bottling Company—licensed to manufacture Coca-Cola products—would be at the top of my list.
Now, I’ll explain Coca-Cola’s competitive advantage and why acquiring Bralirwa shares was essential to me. Coca-Cola is among the few products that defy the law of diminishing marginal utility, where the satisfaction a consumer gets decreases with each additional unit consumed. For example, the more ice cream a child eats, the less they desire more.
Coca-Cola products are crafted to leave minimal aftertaste, allowing consumers to drink substantial amounts in a day and still want more the next day.
This insight clarifies why I would want to invest in such a business and enjoy its long-term profits, which is why I’m drawn to companies like Bralirwa, licensed to produce Coca-Cola products.
As Buffett suggests, “An investor should act as though he had a lifetime decision card with just twenty punches on it.” Following this, I considered another company I’d like to purchase on the Nairobi Stock Exchange at its current price—Carbacid Investments, which mines, purifies, and supplies carbon dioxide to breweries and soft drink manufacturers in East Africa.
This company provides a key resource for beverage preservation, which enhances its appeal to me. Carbacid also produces dry ice to maintain low temperatures for sensitive biological and chemical materials during transport. Additionally, it manufactures medical-grade CO₂ for hospitals, labs, and other medical facilities. In the CO₂ space, Carbacid faces minimal competition, making it a strategic investment even though large brewers like East African Breweries (EABL) have started producing their own CO₂ in-house.
Nonetheless, Carbacid maintains relevance by delivering CO₂ that is “free of an alcohol base, which is a specific requirement for select market segments for ethical reasons and to enhance customers’ yields.” Carbacid, therefore, aligns with my investment in Bralirwa. As I prepare to invest in the company on behalf of my clients, I spend time drafting a report on why I favor only one company in Tanzania that I’ll soon invest in: Tanzania Portland Cement.
