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Ethiopia beer market hots up as Chinese group enters the fray

Competition in Ethiopia’s beer market is set to intensify after the newly established Habesha Breweries embarked on the construction of a $30-million plant.

The company has awarded Chinese manufacturing giant Lehui Group a turnkey contract to build a manufacturing plant with a capacity to produce 300 000 h? a year, and plans to eventually expansion to 500 000 h?.

The plant will be located in Debre Berhan, some 130 km north of Ethiopia’s capital, Addis Abeba.

“After evaluating the technical, financial and project management capacity of the selected turnkey bidders, we have settled on Lehui Group,” says Habesha Breweries CEO Yonas Alemu. He adds that construction of the plant is expected to take 14 months.

Lehui Group is the leading beer manufac- turer is China, which has overtaken the US as the leading beer market.

Although 16 companies had expressed interest in undertaking the project, only three got to the technical and financial evaluation stage. Besides Lehui, the others were Ziemann Ludwigsburg, of Germany, and Techno Export, of the Czech Republic.

Alemu says the company plans to employ about 350 people at the start of brewing opera- tions and to export 20% of its product.

The entry of Habesha is bound to intensify competition in the Ethiopia beer market, which has five manufacturers and where consumption has been growing at an average of 24% a year, according to research done by Access Capital in 2009.

Recently, Heineken completed the acquisition of two State-owned brewers, Bedele Brewery, at a cost of $85,2-million, and Harar Brewery, for $78,2-million.

BGI Ethiopia, a subsidiary of French drinks company Groupe Castel, is currently the largest brewer in Ethiopia, commanding about 50% of the market. Other brewers are Meta Abo Brewery and Dashen Brewery.

19 Jul. 2011

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