ETHIOPIA-BREWERY Ethiopia's Dashen Brewery opens new plant to increase beer output

Record ID: 129370

  • Title: ETHIOPIA-BREWERY Ethiopia's Dashen Brewery opens new plant to increase beer output
  • Date: 16th November 2015
  • Summary: VARIOUS OF ETHIOPIAN PM HAILEMARIAM DESALEGN AND OTHER VISITORS
  • Embargoed: 1st December 2015 12:00
  • Keywords:
  • Location: Ethiopia
  • Country: Ethiopia
  • Topics: General
  • Reuters ID: LVA5NK87Z03GOX9ZACWY9AQKIUL3
  • Aspect Ratio: 16:9
  • Story Text: Ethiopia's Dashen Brewery launched a new plant in Debre Birhan about 100 kilometres northeast of Addis Ababa, over the weekend, as part of plans to expand its beer production in the country.
    Dashen is one of the largest brewing companies in Ethiopia and its new facility will have a production capacity of two million hectolitres, with possible further expansion in future.
    The company manufactures Dashen beer and Royal Draught among others.
    In combination with Dashen's existing brewery in Gonder in the country's northwest, this means that Dashen's beer production in Ethiopia will have tripled since the landmark investment in 2012.
    The venture is part of a partnership between multinational consumer goods company, Vasari Global, UK-based asset management firm, Duet Group, and the TIRET Group, a consumer goods company.
    Ethiopia's Prime Minister, Hailemariam Desalegn officially opened the plant on Sunday, (November 15).
    "Duet, Vasari and TIRET have shown that companies from the United Kingdom and Ethiopia can jointly venture for mutual prosperity and this best practice has to be scaled up," said Desalegn.
    Competition in the industry has been growing in recent years; international brewers are helping transform Ethiopia's business landscape as the former communist state opens up to foreigners drawn to one of Africa's fastest growing economies.
    Heineken, Diageo and privately-owned Dutch brewer Bavaria, have snapped up state breweries or built new ones in the past four years, introducing new beverages and increasing competition for St George, Ethiopia's oldest beer brand, that was itself bought by France's Castel Group in 1998.
    The east African nation that once could not feed itself now draws investors keen to profit from the increasing prosperity of its 96 million people.
    "As often said, beer is the drink of the middle class and we have a growing middle class in our country as the income of our people is growing. From this perspective the beer industry can generate huge revenue in country. That is why we are getting a lot of new beer factories. Even with our new factory manufacturing 2 million hectolitres, we still cannot satisfy the demand. Therefore the market is still open. On top of that there is a pressure from the government that all beer factories should export 20 percent of their product to foreign markets. So, if we start to export 20 percent of our products there will be even more space in the market to fill," said Tadesse Kassa, the TIRET group CEO.
    The plant is said to be one of a handful of its kind in the world, and represents major advantages in terms of consistent quality and efficiency -- lowering operating costs and minimising environmental impact through energy and water conservation.
    Ethiopia has rapidly opened up the beverage sector, but has moved more cautiously in other industries. Telecoms remains in state hands while banks and retail businesses are off limits to foreigners.
    The government says it needs the revenues from telecoms to pay for new railways, roads and dams. It says some businesses need protection until they can compete with foreigners.
    The new brewery promises to create several hundred new jobs in the area, as well as indirect employment through its supply chain, which includes local farmers growing barley.
    "We are working hard to become number one. If something happens and just one beer factory is left in Ethiopia, we are saying Dashen should be that persistent one. After few years there will be surplus products more than the market can carry. Therefore, the competition will be about quality, customer care, service delivery and good promotions. Only those who do their best at these attributes will survive. Otherwise, by the year 2018 the beer market will be saturated and supply will surpass demand," said Mekbib Alemu, Dashen beer deputy CEO.
    Investors are watching developments in the drinks industry closely but they face various difficulties. While Ethiopia is expanding the road and rail network, the nation's fleet of trucks is old and transport costs are three or four times those in Europe.
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