Glass Company’s 1.1b Br Expansion Gives Competitive Edge


Feasibility study indicated demand for 265 million bottles a year in the country.




Addis Abeba Bottle & Glass (AAB&G) S.C. is undertaking a 1.1 billion Br expansion project to meet growing demand.

The 40 year old company, now co-owned by Ethiopian and Chinese investors, is facing rising demand especially from the brewery industry.  Currently its capacity stands at 30tn of glass per day or 20 million bottles per annum. With the expansion, taking place in three phases, Addis eyes a production capacity of 150tn of glass and 153 million bottles per year

It is undertaking the expansion on 80,000sqm of land at its premises near Mickey Leland condominium along Ambo Road. It will finalise the first phase of the expansion in six months, with the remaining two phases expected to take one year. In addition to 360 employees it has, it will also add 328 additional workers once the project is over.

Prior to the commencement of the expansion, a feasibility study had indicated that there is a demand for 265 million bottle a year in the country.

A single beer factory alone demands 14 million bottles, which the factory is not able to deliver, says Semen Bekele, plan & information service head at the factory. AAB&G used to supply for beer brands under Diageo but the company no longer supplies bottles for these brands. Now they supply bottles to BGI, brewers of St. George’s Beer.

It also, supplies bottles for cosmetics companies and agro processing plants.

Addis is now constructing the plant that will process the raw materials and pass them to the three other plants that are yet to be constructed, Semen says. It uses raw materials such as limestone, marble, soda ash and glasses, 98pc of which is accessed locally. These raw materials are kept on a heap in the compound of the factory.

Addis is also moving its warehouse to Sululta, 25Km north, in order to minimise the dust that affects residential areas nearby. Land is currently being processed to facilitate this move.

The company was under state ownership until five years ago, when Bazeto Industries & Trading Plc bought it.

Addis is the first of three glass factories in Ethiopia. There is now also Ethio Hanssam International Plc and Daylight Applied Technologies, with production capacities of 42,000tn and 20,000tn, respectively.

Three new factories are also under development with completion scheduled for March 2016.

Juniper Glass Industries Plc also started construction of its plant in Debre Berhan in April 2015 with a production capacity of 150 million bottles a year. Goda Glass & Bottling S.C, in Tigray, and Allied Chemical Plc are also expected to have factories with capacities of 90tn and 50tn a day each.

Though the Institute for Glass Industry Development under the Ministry of Industry is collecting data in order to estimate local demand, it confirms that the demand is rising, said Director, Mengistu Getachew.

“We are closely working with these projects, assisting them in different aspects, for instance training their experts,” says Mengistu.

Customs data indicates that Ethiopia imported 73,400tn of glass in 2014 at a cost of 1.2 billion Br, up from 65,500tn and 970 million Br in 2013; 56,400tn and 732 million Br in 2012, and 40,000tn and 517 million Br, in 2011.



By DAWIT ENDESHAW
FORTUNE STAFF WRITER

Published on Sep 21,2015 [ Vol 16 ,No 803]


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