March 8, 2013
At between 4-5 litres a year, Ethiopia’s beer per capita consumption is one of the lowest in the region. Yet its market has doubled over the last five years thanks to its growing population, urbanisation and rising incomes. All this is proving to be an irresistible draw for global brewers – with Heineken the latest to announce plans to build a new $156m brewery in the country.
The Heineken brewery, to be built in Kilinto, Addis Ababa Municipality, will be the largest in Ethiopia and will have the capacity to produce up to 1.5m hectolitres of Harar, Bedele and Heineken brand beers.
As part of its expansion into Africa, in 2011 Heineken snapped up 18 per cent of the Ethiopian beer market through its acquisition of the Bedele and Harar breweries from the Ethiopian government for $85million and $78 million respectively.
Heineken is emphasising its goals to do more in Africa. Last week a Memorandum of Understanding was signed at the new site between the firm, Netherlands’ minister for Foreign Trade Lilianne Ploumen and two Ethiopian institutes for a project aimed at increasing malt barley in Ethiopia.
John Dover, general manager of Heineken Ethiopia, said: “As a brewer we are very committed to the African continent and the opportunities it presents. Heineken aims to be a Partner for Growth for its communities and developing better techniques and a better route to market for local produce, which also allows us to increase the amount of raw materials we can obtain through local sourcing is a key part of that.”
Heineken is not the only international brewer expanding in Ethiopia. The UK’s Diageo last year snapped up Meta Abo Brewery, maker of the country’s number two beer brand Meta, in a $225m all cash deal.
A Diageo spokesman told beyondbrics: “We have since invested in increasing production through supply efficiencies, increasing our sales force and broadening our outlet coverage as well as investing in building the Meta brand which has led to market share growth.
“We are also working closely with the Ethiopian Government and smallholder farmers in a pilot project to sustainably secure quality barley inputs into the brewery from the local community. We are committed to building our business in Ethiopia, which is fast becoming an important contributor to our growth in Africa,” he said.
Ethiopia is Africa’s second most populated country with approximately 85m people and population growth of 2.5 per cent per annum. It is also one of the fastest growing non-oil economies in Africa with a stable political environment and growing personal incomes.