ETHIOPIA – Heineken Ethiopia has invested US$145.98 million in an expansion project at its plant in Qilinto set to be inaugurated this month to increase its production capacity by a third of its previous output, reports Addis Fortune.
The project which took 14 months came after Heineken received US$46.37 million letter-of-credit facilitation from the government last year to undertake the expansion.
The expansion increases the annual production capacity of beer by Heineken’s Ethiopian wing at the Qilinto plant to 4.5 million hectolitres annually, bringing its overall capacity, added with the Bedele and Harar breweries to 5.5 million hectolitres a year.
Other new developments include expansion of its bottling lines, brewing houses, and fermentation and storage tanks as well as raising the number of employees by 100 to 1,000.
The bottling lines were supplied by the German company Krones Group while the Chinese firm Lehui Group delivered the fermentation and storage tanks.
This is its second investment at the plant after inaugurating its one-year expansion project executed at a total cost of US$86.82 million in 2016, giving the company the highest production capacity in Ethiopia’s brewery industry.
Heineken entered the Ethiopian beer market in 2011 following the acquisition of Harar and Bedele breweries for US$163.4 million in the government’s privatization scheme.
Heineken opened the US$127.56 million 1.5 million hectolitres Qilinto factory in 2015, initially focusing on local brands Hamar and Bedele.
After consecutive expansions, it introduced its flagship brand, Heineken Beer and it also produces Buckler and Sofi beers.
In Ethiopia, the brewer said it has invested US$348.06 million, with eyes on Africa, the fastest-growing region for the group and accounting for 20% of its revenue.
Heineken is present in Africa since 1920s and today, it owns 57 breweries and plants in Africa and is selling beer in the majority of African countries.
“Investment in the brewery industry is showing a massive increase as multinational companies are heavily attracted to the business,” said Aklilu Kefyalew, director of Beverage Processing at the Ethiopian Food Beverage & Pharmaceuticals Industry Development Institute.
“This is, in turn, ushering in competition.
Even though the quantity is not much, the export destinations have also increased.”
Ethiopia with a per capita beer consumption of eight to 10lt annually, has seven breweries and over 20 local beer brands.
Heineken has the largest share in the market and its closest competitor is BGI Ethiopia, brewer of St. George, Castel and Amber beer brands, which produces five million hectoliters of beer annually.
It exports mainly to US, Israel and South Sudan.