Ethiopian water bottling company ventures into the Middle East market

ETHIOPIA – Abebe Dinku Water & Non-Alcoholic Beverages, Ethiopian bottler of Top Water brand, has penned a 20-year deal with a Saudi Arabian company, Al Naba Jeldi Water Company to export the bottled water brand.

The deal was sealed last month and Abebe Dinku is geared up for the first shipment consisting of 1,000, 350ml bottles and 6,668, 600ml bottles worth US$1m as soon as Saudi Arabia lifts its lockdown imposed following the outbreak of the corona virus.

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Before inking the deal, the two parties completed a successful three-month testing and sampling process, reports Addis Fortune.

“We opened a letter of credit (LC) to ship the first batch,” said Abebe Dinku, founder of the company, “but due to the Novel Coronavirus (COVID-19), we haven’t been able to ship the first batch since Saudi Arabia has closed its ports.”

Established with an investment of Br 273 million, Abebe Dinku has a production capacity of 126,000 bottles of water an hour.

In addition to the export market in Saudia Arabia the company has also received a new order for shipment to Oman which it is currently working on.

“The export benefit isn’t much compared to the local sales, but it has its own perks since it will give us foreign exchange, and value added tax (VAT) and excise tax are also completely revoked if a bottler is engaged in exporting,” said Shimelis Ajemma, marketing manager of the company.

With close to 97 bottlers operational in the country, increasing competitiveness in the industry compels the bottlers to stretch their reach to foreign countries.

Earlier this year, Garanba Bottling, a subsidiary of B&C Aluminum Plc that bottles South Spring Water in Ethiopia, has closed a deal with a UK-based company to export US$1m worth of bottled water to England.

According to Market Data Forecast, Middle East and Africa Bottled Water market size was worth US$12.01 billion in 2018 and is estimated to be growing at a CAGR of 8.7% to reach US$16.85 billion by 2023.

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