Plant will produce Harar and Bedele products, as well as the Heineken brand
Heineken Brewery, the world-renowned brewery with a presence in 84 countries, operating over 165 breweries producing 254 brands, inaugurated its largest factory in Ethiopia with an investment of 110 million euros.
The factory, which rests on a 343sqm plot of land in the outskirts of Addis Abeba in a place called Kilinto, on the way to Debre Zeit, has a capacity of producing 1.5 million hectoliters a year. Heineken opened its first African plant in 1923 in the Congo; it now has a presence in more than a dozen African countries, where it employed around 15,000 people in 2010.
The new investment, which comes following the acquisition of Harar and Bedele breweries in 2011, raises the total investment of the company in the country to 310 million euros. Heineken employs 280 people at the new plant, out of which 180 are permanent.
Heineken, which reported revenue of 3.07 billion euros in Africa and the Middle East that led to an operating profit of 665 million euros in 2013, needs a total of 20,000tns of malt a year for the new factory, out of which 50pc is sourced from the local market.
"We are planning to source our malt barley from local farmers through the integration of smallholder farmers in the CREATE project that the company launched in 2013," said Jean-François van Boxmeer, Chairman of the executive board and the CEO of Heineken NV.
CREATE is a program by Heineken aimed at improving both quality and quantity of barley grown in Ethiopia as well as improved access to markets for the small-holder farmers. By 2017, the company plans to support 20,000 farmers in the production process.The company has now integrated 6,000 smallholder farmers in the supply of the malt barley. And by 2020, the factory plans to source 60pc of its production ingredients from the local market.
Diageo, owner of Meta Brewery, had also designed and piloted barley contract farming project with the aim to source 1,000 metric tons of barley from a substantial number of local smallholder farmers with a potential to source up to 20,000 metric tons of barley within Ethiopia for local use and/or export a year.
The factory gets the water needed for the brewing process from the two water wells 1.5km from the factory each having the capacity of generating 141 cubic meters of water per hour. The wells have a 400m and 500m depth with a temperature of 32 degree Celsius.
The new factory at Kilinto is now producing the seven brands of the company's beers through its two brewing lines, each having a capacity of producing 42,000lt an hour. The seven brands produced are Bedele Regular, Bedele Special, Walia Beer, Harar Beer, Hakim Stout, Harar Sofi, and Sofi Lemon. It is also planning to commence producing Heineken beer in April.
While this happens in Addis Abeba, Heineken plans to reach the eastern Ethiopia market through Harar Brewery and the western market through Bedele Brewery.
In a country with a per capita consumption of beer at about five litres, Heineken produced 101 hectoliters only in December.
The civil construction of the brewery, done by Rama Construction Plc, took two years to complete.
The inauguration ceremony on the 15th of January, 2015 was attended by Prime Minister Hailemariam Desalegn and the state minister of Industry Mulatu Meles (PhD).
Heineken, which has invested 310 million euros in the country, plans to expand the factory within the same compound.
Together with the 600,000 hectoliters and 900,000 hectoliters production capacity of Bedele and Harar beer factories respectively, the factory's production will make the country's production capacity of six million hectoliters increase by three million hectoliters.
"The major strategic purpose of opening this factory is the need to address the 1,000km distance between the Bedele and Harar factories, which is difficult for logistics," stated Johan Doyer, the managing director of Heineken Ethiopia.
Heineken plans to export products from Ethiopia to African and the Middle Eastern markets.
Copyright Addis Fortune. Distributed by AllAfrica Global Media (allAfrica.com).