KENYA – East Africa’s largest brewing concern East African Breweries Limited (EABL) has announced plans to open a new KSh15 billion (US$150 million) brewery in Kisumu, Kenya, returning to the city where it closed operations in 2002.
The announcement, made by Kenya’s President Uhuru Kenyatta, and the single largest in decades in the brewing industry in Kenya, is expected to “open a significant socio-economic lifeline for the Nyanza region and Kenya at large, creating over 100,000 direct and indirect jobs to support its expansive value chain.”
The new brewery construction, earmarked for production of Senator beer, will be launched on July 16, 2017, and is projected to start operating within the next 18-24 months, according to the company.
“This multi-billion-shilling commitment by the EABL underlines the strong confidence driving local and global investors in Kenya with significant multiplier effects to the Kenyan economy in future.
I’m especially delighted by the projected benefits resulting from this investment, potentially doubling the demand for sorghum and millet in Kenya and recruiting over 15,000 farmers in the process with guaranteed market for the crop,” said Kenya’s President Uhuru Kenyatta, at the announcement ceremony at the State House, Nairobi.
Present at the meeting was Diageo Africa President John O’Keeffe, EABL Group Managing Director, Andrew Cowan and Kenya Breweries Ltd Managing Director, Jane Karuku.
Investment in Senator, the low cost lager beer that continues to drive the growth of the brewer’s business in Kenya – where swings in regulatory policy has affected the company’s mainstream and premium products – shows the renewed commitment of the brewery in the country, and is indicative that the brewer has turned the corner in its performance and willing to be more aggressive in its strategy in Kenya.
The brewer has recorded increased consumption of spirits in Kenya and the region, with a focus of its investments geared towards improving capacity in Senator and spirits not just in Kenya but the regional market as well.
“This investment in a new brewery for Senator Keg underlines our long-standing commitment to Kenya.
This announcement now brings our incremental capital investment to KSh 30 billion (US$ 300 million) over the last five years and further deepens our relationship with Kenya which has now spanned 95 years,” Ivan Menezes, the CEO of Diageo said.
“Once complete, this new brewery will increase the production capacity of the now iconic Senator Keg, which will in turn provide socio-economic benefits, including helping to reduce the consumption of illicit brews,” he added.
“The re-opening will help plug fresh demand for Senator, a hugely successful beer product launched in 2004, targeted at the low-end of the market.
EABL has developed a robust value chain supporting Senator’s production, and the latest investment will expand the number of contracted farmers from the current 30,000 to 45,000,” says the company.
EABL has seen the share of its business attributed to Kenya rise significantly from 61% as at the end of financial year 2015 to 74% at the end of 2016 due to stagnant market share in Uganda and Tanzania, and the collapse of its export business into South Sudan due to internal strife.
The investment in Kisumu, in western Kenya, which the company opened in 1984 only to close in the mid 2002, fits into its renewed focus on Kenya – as it seeks to defend its stranglehold on the country’s beer industry from imported beer from the region and abroad.