Heineken Ethiopia is set to increase its production capacity by a third of its previous output. The new 126 million euro expansion that took 14 months, involved 1,500 people at its Qilinto plant.
The brewer’s expansion at its plant in Qilinto will be inaugurated this month. This is the second development after the company’s 2016 investment of 112 million euro.
The expansion comes on the back of a 40 million euro letter-of-credit facilitation that Heineken received from the government last year to undertake the expansion project.
The expansion increases the annual production capacity of beer by Heineken’s Ethiopian wing at the Qilinto plant to 4.5 million hectolitres annually.
This will bring its overall capacity, added with the Bedele and Harar breweries that produce a million hectolitres together, to 5.5 million hectolitres a year
Heineken’s expansion has expanded its bottling lines, brewing houses, and fermentation and storage tanks as well as raising the number of employees by 100 to 1,000.
Five firms participated in the companies expansion project. Elmi Olindo Construction was the prime contractor while GTC, a local company, and the Netherland-based, 135-year-old, Royal Hasconing DHV acted as consultants.
The German company Krones Group supplied the bottling lines while the Chinese firm Lehui Group delivered the fermentation and storage tanks.
Elmi Olindo has been in the construction business since 1937, and recent major projects it undertook include restoration work of rock-hewn churches in Lalibela and the Ethiopian Airlines Aviation Academy.
Heineken entered the Ethiopian beer market in 2011 following the acquisition of Harar and Bedele breweries for 163.4 million dollars in the government’s privatization scheme.
Heineken’s plant in Qilinto opened three years ago and started operations by producing its Walia Beer Brand. After consecutive expansions, it introduced its flagship brand, Heineken Beer. It also produces Buckler and Sofi beers.
“Investment in the brewery industry is showing a massive increase as multinational companies are heavily attracted to the business,” says Aklilu Kefyalew, director of Beverage Processing at the Ethiopian Food Beverage & Pharmaceuticals Industry Development Institute. “This is, in turn, ushering in competition.”
There are seven breweries and over 20 local beer brands for a nation with a per capita beer consumption of eight to 10lt annually.
Heineken has the largest share in the market. Its closest competitor is BGI Ethiopia, brewer of St. George, Castel and Amber beer brands, which produces five million hectoliters of beer annually.
“Even though the quantity is not much, the export destinations have also increased,” Aklilu said.
The United States, Israel and South Sudan are the main export destinations.
Alazar Ahmed, a marketing expert for more than a decade, believes that the beer market is yet untapped.
“Ongoing acquisitions and expansions in the brewery industry point to soaring competitions to come,” he says.
Heineken is a Dutch brewing company founded in 1864. By 2015 it owned over 170 beer brands and around 165 breweries in more than 70 countries, employing 76,000 people.
The annual beer production of Heineken is 181.3 million hectoliters and ranks as the third largest brewery in the world.
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