Heineken Launches Construction of a New Brewery in Addis Ababa, Ethiopia
By Berhanu Fekade
March 5, 2013
The world renowned Dutch-based Heineken Brewery launched the construction of a new factory here to brew 1.5 million hectoliters of beer after the construction completes in 18 months time.
Addis Ababa, Ethiopia — With the presence of Lilianne Ploumen, Netherlands Minister of Foreign Trade and Development Cooperative, the company launched a 120-million Euro construction project last Thursday here in Addis at a place called Kilinto, around the Kaliti area. During the launching, Johan Doyer, general manager of Heineken said that the new brewery would brew the Heineken brand with the existing Bedele and Harar local beers that are currently owned by the company. It is to be recalled that Heineken joined the beverage industry last year after purchasing the two brewery factories with an investment of USD 163 million.
Doyer told journalists that the deal to obtain loans from local banks is under process. Though he refrained from disclosing the amount of money he is looking for, however, he nodded that the loan amount will extend between three to five billion birr. And unwilling to name the bank he is dealing with, some say the government owned Construction and Business Bank is the frontier.
In related news, Heineken signed a tripartite Memorandum of Understanding (MoU) with two government offices for the supply of malt barley locally. The four-year deal makes Heineken better off, getting some 20 thousand MT of malt barley every year from smallholder farmers. According to Doyer, it is part of the 60 percent raw materials supply from within Africa that Heineken envisaged to reach the level by 2020. The Ethiopian Agricultural Transformation Agency (ATA) signed the MoU to facilitate the supply chain and the Ethiopian Institute of Agricultural Research (EAIR) will undertake research and will foresee the availability of seed varieties for malt barley.
The current supply shortage of malt in the local market forced Heineken to jointly look for options that in later years about 100 thousand farmers are expected to take part in the supply chain. The oldest and government owned Assala Malt Factory processes malt way below 60 percent of the total demand of the industry. The total capacity ranges between 16 to 20 kMT per year.
The tripartite malt barley program involves the Netherlands Foreign Affairs Ministry and an NGO called the European Cooperative for Rural Development, the previous as a co-financier and the latter as an executing agent.
Heineken runs some 165 breweries in over 70 countries with a volume of 221 million hectoliters a year. Last year the company grossed more than 19.7 billion euros.
ETHIOPIA: Heineken to break ground on brewery
By Andy Morton | 5 March 2013
Heineken is to build a 1.5m-hectolitre-a-year brewery in Ethiopia as it targets growth in the fast-developing country.
Construction on the Kilinto, Addis Ababa plant will begin “in the near future”, a Heineken spokesperson told just-drinks today (5 March). The brewery is expected to be operational by the second half of 2014.
It will be Heineken’s third, and largest, brewery in the country after the state-owned Bedele and Harar plants it acquired in 2011. At the time of purchase, the two breweries had a combined market share of 18% with brands such as Bedele, Harar, Hakim Stout and Harar Sofi. The Kilinto plant will produce Harar, Bedele and brand Heineken beers, Heineken said.
Plans for the new brewery were announced after Heineken and Dutch Government representatives visited Ethiopia last week to sign a memorandum of understanding with officials. The memorandum launched a four-year malt barley programme to improve the quality and supply quantities of malt barley in Ethiopia.
Heineken said the beer market in Ethiopia, Africa’s second-most populated country, has doubled in the past five years, and has strong potential for expansion.
To read the official press release from Heineken, click on the link below (PDF):
280213 Press Release HEINEKEN barley program Ethiopia
Click the link below to read from the Financial Times blog:
Heineken to build Ethiopia’s biggest brewery
Related Backgound Post
Heineken Completes Acquisitions of Two Breweries in Ethiopia
Amsterdam, 11 August 2011 – Heineken N.V. today announced that it has completed the acquisitions of the Bedele and Harar breweries from the government of the Federal Democratic Republic of Ethiopia for US$85 million and US$78 million, respectively. These transactions follow Heineken’s participation in the public auctions for the two breweries.
Siep Hiemstra, who from August 1st succeeded Tom de Man as Regional President Africa and the Middle East for Heineken, commented:
“We are delighted to have acquired these two breweries which give us a sustainable footprint in one of Africa’s most exciting beer markets. The transactions reflect Heineken’s strategy of increasing our exposure to and growth from developing markets.
Just as importantly, our expansion into the Ethiopian market increases our long-term commitment to Africa. Heineken will immediately look for ways to use less water in the brewing process. It will introduce practices to ensure that water returned to the eco-system is clean so local users are not prevented from gaining access to clean, fresh water. Heineken is also committed to working closely with farmers and small-holders to help build their understanding of sustainable agricultural practices to increase yields and enable permanent, positive change in the country.
Heineken’s work in these areas has delivered positive economic and social benefits in other countries across Africa and we expect the same positive impact in Ethiopia.”
With brands such as Bedele Premium, Bedele Special, Harar, Hakim Stout and Harar Sofi (malt), the two breweries have a combined market share of 18% in the Ethiopian beer market.
Ethiopia is Africa’s second most populated country with 85 million people and its beer market (3 million hectolitres in 2010, source Plato) grew approximately 20% per year over the past 5 years, compared to a GDP growth of 8%. Beer and non-alcoholic malt consumption in Ethiopia was approximately 4 litres per capita in 2010, which is well below the global average of 27 litres and below beer consumption in other countries in the region, such as Tanzania (7 litres), Uganda (9 litres) and Kenya (10 litres). In addition to a fast growing population and a developing beer market, the country’s political stability and improving economy, make Ethiopia a promising, long-term growth market for Heineken in Africa.
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Heineken is one of the world’s great brewers and is committed to growth and remaining independent. The brand that bears the founder’s family name – Heineken – is available in almost every country on the globe and is the world’s most valuable international premium beer brand. The Company’s aim is to be a leading brewer in each of the markets in which it operates and to have the world’s most valuable brand portfolio. The Company is present in over 70 countries and operates 140 breweries with volumes of 205 million hectolitres of beer sold in 2010 on a pro-forma basis. Heineken is Europe’s largest brewer and the world’s third largest by volume. Heineken is committed to the responsible marketing and consumption of its more than 200 international premium, regional, local and specialty beers and ciders. These include Amstel, Birra Moretti, Cruzcampo, Dos Equis, Foster’s, Kingfisher, Newcastle Brown Ale, Ochota, Primus, Sagres, Sol, Star, Strongbow, Tecate, Tiger and Zywiec. On a 2010 pro-forma basis, including FEMSA Cerveza, revenue totalled €17 billion and EBIT (beia) was €2.7 billion. The average number of people employed is more than 70,000. Heineken N.V. and Heineken Holding N.V. shares are listed on the Amsterdam stock exchange. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIA NA and HEIO NA and on the Reuter Equities 2000 Service under HEIN.AS and HEIO.AS. Most recent information is available on Heineken’s website: www.Heinekeninternational.com.