Angolan brewery EKA to close operations on account of financial constraints

ANGOLA – Angola based beer company, EKA brewery is set to halt its operation this month, June, following piled up operational costs with the move to render more 147 people jobless.

Speaking to ANGOP, the General Director of EKA Brewery, Marc Mayer revealed that the company faces huge finance issues, aggravated by difficulties in acquiring raw material and parts to maintain the machines.

Marc Mayer explained that about 70 per cent of EKA’s revenues are used to purchase spare parts and raw materials without advancing billing data, a situation that implied a significant reduction in production volume.

The remaining 30 percent of the revenues have been used to pay taxes and wages, leaving the brewery without profit at the end of the month, thus justifying the decision to stop production.

The company consists of 197 workers; however, this stoppage will force EKA to send away 147 people who are linked to the company through a limited time contract.

The remaining 50, who have contracts for an indefinite period, will ensure that the company’s minimum services are maintained.

According to Marc Mayer, after its closure, the company will be transformed into a commercial warehouse.

By 2018 EKA had already suffered a signicant reduction in its production reporting a 40 per cent decline following the shutdown of it first filling line.

As a result, production capacity fell from 55,000 litres of beer per hour to 27,000. However, the costs of operating continued to rise, putting the company in major financial trouble.

A source from the EKA union commission contacted by ANGOP, stated that high yields in the form of dividends, distributed to the other shareholders of the company is what is ailing the company.

The source fears that the measure adopted by the Castel Angola group, EKA’s largest shareholder, aims to put pressure on the State, as a member of the shareholder structure, to accelerate the company’s privatization process.

The Castel Angola holds 46% of EKA shares, a private group holds the other 50%, while the Angolan state remains with 4 per cent.

The local government of Cuanza Norte province where the brewery is located is against the closure because of the implications the action will bring to the lives of the residents.

The local government has hereby request the intervention of the Ministries of Trade and Industry and the Economy, as well as other central government structures, for solutions to avoid the stoppage, so as to safeguard jobs and the economic and financial interests of the factory.

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