Heineken Ethiopia is set to inaugurate its one year expansion project executed at a total cost of 2.4 billion Br. The project will give the company the highest production capacity in Ethiopia’s brewery industry. When fully operational the capacity of Heniken is expected to surpass the current leader in the industry, BGI Ethiopia by one million hectoliter.
Elmi Olindo Contractors Plc has carried out building on the expansion, which took 14 months to complete while LEHUI Group was involved in brewhouse setup and the installation of fermentation and storage tanks. Elmi Olindo which is an Ethiopian-based company is the same company who was also behind the construction of Dashen Brewery plant in Debr Berhan. It began its activity in 1937 in Asmara, Eritrea.
The expansion will double the capacity of the Qilinto plant, in the souther outskirt of the capital in particular and will boost the total production of three plants including Bedele and Harar to four million hectoliters, a year. To date, the company has invested close to 11 billion Br in Ethiopia.
The first plant at Qilinto was known for producing only Walia beer. Following this expansion the market will see the company producing its flagship brand, Heineken Beer. The Qilinto plant will become the seventh Heineken producing factory in Africa to produce Heineke Beer. Heineken beer is widely consumed across 30 African countries.
With the opening of the new plant, Heineken will overtake BGI as Ethiopia’s biggest beer production company. BGI is now producing three million hectoliter per a year.
The expansion will also increased the company’s employees to 270 from 290, in addition to hundreds of outsourced employees, such as security and janitorial workers.
Heineken entered the Ethiopian market in 2011 following the acquisition of Harar and Bedele breweries for 163.4 million dollars, through the government’s privatization policy.
“We are investing for the future,” said Fekadu Beshah, external communications and sustainability manager at Heineken Breweries S.C.
“We are preparing for a very competitive and dynamic market. Heineken [Ethiopia] is still targeting the local market,” he added The growing brewery market in Ethiopia is attracting new players and fresh injections of cash for production capacity expansion. Just last year, Dashen Brewery invested close to two billion Br in a new plant in Debre Birhan, which is now operational. Diageo-Meta finalized its own expansion at a total cost of 780 million Br, boosting its production to 1.7 million hectoliters. In the past five years, new brewery companies such as Habesha and Raya have also joined the market.
“I think nowadays, the brewery companies are expanding for one reason: to position themselves along different segments of the society,” commented a marketing expert who is close to the industry.
“The companies always need to update themselves by introducing new brands and targeting new markets in a stiff market”, said the expert.
The market is now believed to have a total production capacity of 10.5 million hectoliters. With Heineken’s expanded capacity, that figure will reach 12 million hectoliters.
“Urbanization and economic growth coupled with aggressive promotional campaigns have contributed to an increase in demand,” said Abdulemenan Mohammed Hamza, a financial expert told Fortune.
With the growing industry, per capita consumption has also increased. In 2013, the figure was at five liters while latest reports show that is has now escalated to eight liters.
There are currently seven breweries operating the country.
Source : AddisFortune