Italian company Hebron Plc invests US$1.8m in production of coffee capsules in Ethiopia

ETHIOPIA – Hebron Trading Plc, an Italy headquartered company, has set base in Ethiopia, investing Birr 80 million (US$1.8m) to add value to locally grown coffee, packaging them into capsules used for brewing espressos.

The company based in the recently inaugurated Yirgalem Agro-Industrial Park, is currently undertaking machinery and equipment installation and targets to launch in the market by July, reports Addis Fortune.

Once completed, Hebron will be the first company to locally produce the value-added coffee product in Ethiopia

Ethiopia’s coffee exports accounted for 28.6% of the country’s foreign earnings in the last fiscal year.

However, the report notes that more than 90% of coffee exported, which totalled Birr 866 million (US$20.3m), was in the form of unprocessed coffee beans.

Processing the coffee domestically and exporting the resulting products could potentially add billions of dollars a year to export earnings.

“Producing the final product in Ethiopia will help the country keep more than 83% of the benefits it’s failing to gain in the coffee life cycle,” said Daniel Eilu, General Manager of Hebron.

The family-owned business, can produce three brands of capsules – Nespresso, A Modo Mio, and Lavazza Blue, but will begin production with only the highly marketable Nespresso type.

Around 14 billion capsules of Nespresso, one of Nestlé’s products, are sold annually across the globe making it a market leader.

Understanding the huge global market, Hebron plans to ship 80% of its capsule to Europe, where the product has already gained traction with the remaining 20% marketed domestically.

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“Producing the final product in Ethiopia will help the country keep more than 83% of the benefits it’s failing to gain in the coffee life cycle.”

Daniel Eilu – General Manager of Hebron

To promote the product in the local market, the coffee processor plans to import capsule espresso brewing machines and distribute them to offices and workplaces with a discounted supply of the capsules.

In addition, it will offer packaged coffee, both unprocessed and roasted, for local consumption and export.

Hebron is prepared to produce four products and two blends from coffee sourced from Guji, Sidama, Yirgachefe, and Jimma.

It will produce 403 tons of value-added coffee annually, of which 19.3 tons will be in the form of capsules.

Hebron will initially source the coffee from the Ethiopian Commodity Exchange (ECX) but its long-term plan is to purchase coffee directly from farmers, pending approval from the Ethiopian Investment Commission.

The new plant lies on 6,000sqm of land in the agro-industrial park, which was inaugurated around two months ago, leased from the Sidama Industrial Park Corporation for 30 years at the cost of 7,200 dollars a month.

The company was principally given a license for investment in Ethiopia in September 2019 from the SNNP Regional State.

But following the 2019 Sidama referendum, it was forced to apply for a license from the Sidama Regional State Investment Bureau, which was granted in September 2020.  Hebron was then directed to the Federal Investment Bureau, where a final license was issued a month later.

Hebron Trading Plc has been producing and selling Nespresso capsules since 2004 in Italy, a country known for its special attention to the preparation and selection of blends, and the use of accessories when brewing various kinds of coffee.

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