BGI Ethiopia announces resumption of operations in Raya Brewery

ETHIOPIA – Raya Brewery, a unit owned by BGI Ethiopia, has resumed operations following 2 years of stoppage due to the Tigray War in the Tigray regional state that lasted from 3 November 2020 to 3 November 2022, as per the official announcement made by BGI Ethiopia.

The Brewery was established by 58 founding shareholders, including Tsadkan Gebretinsae, former army chief of staff, and Ambachew Abreha, former head of Ethiopian Shipping Lines (ESL), back in April 2010.

The two-billion-birr beer plant is located in the historic town of Mayichew, 662 km north of Addis Ababa, and has a production capacity of 710,000 hectoliters annually, according to local news.

The resumption of the brewery will strengthen BGI’s market reach further, following the recent 500 million Birr (US$9.3 million) investment in its Meto Abo Brewery to remodel and expand it to achieve an enhanced capacity and improve its brand.

BGI, the brewing arm of France’s Castel Group, acquired the Meta Abo Brewery from British multinational beverage alcohol company Diageo.

Market analysts viewed the acquisition as a boon to the Ethiopian brewer, which seeks to extend its presence to over 50 percent market share of the country’s beer market.

During the time of ownership of Diageo, the Meto Abo brewery also got a boost of US$119 million in investment to expand its bottling line.

It is recalled that Diageo bought Meta Abo Brewery in Ethiopia in January 2012 from the government for US$225 million in a privatization deal.

Apart from Meto Abo and Raya Breweries, BGI also owns other breweries in the area, including St. George Brewery; Zebidar Brewery; Hawassa Brewery; Kombolcha Brewery, Castel Winery, and Vineyard.

Asoko Insights reports that the first brewery was established in Ethiopia in 1922, and by 1996, there were six in operation.

Private investment in the sector commenced in 1997 when BGI Ethiopia entered the market, building the seventh brewery and acquiring the nation’s first, St George Brewery, a year later.

As the market opened up, local breweries launched and foreign investors, including global majors like Heineken and Diageo, tapped into it through both acquisitions and greenfield investments.

According to Fitch Solutions, Ethiopia’s beer market dominates the formal alcoholic drinks segment in the country, accounting for 98.9% of total consumption in the sector in 2022.

BGI Ethiopia is the second-largest brewer by production volumes, as of the end-2021 following Dutch alcohol brewer, Heineken, which entered the market in 2011, by acquiring two local breweries, Bedele and Harar, for US$163.4 million.

Although the brewery sector has been hit by challenges within the last three years, the introduction of new products and continued investments are an indication that it is a resilient market.

Should consumer demand stay strong, Market Research projects that the sector will reach US$3.12 billion in 2025, registering a CAGR of 10.25% per annum .

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