The Ducth beer giant, Heineken, is to upgrade the Harrar and Bedele breweries at a cost of 100 million dollars.

Heineken bought Harrar Brewery S.C and Bedele Brewery S.C for 78 and 85 million dollars respectively from the Ethiopian Privatization and Public Enterprises Supervisory Authority (PPESA). The agreement was signed on Wednesday and the parties announced the transaction at a joint press conference held on Thursday at the Addis Ababa Hilton Hotel.

Beyene Gebremeskel director general of PPESA told The Reporter that Heineken will invest close to 100 million dollars on expansion projects in the two breweries. “We are happy that we are able to attract the third biggest brewery in the world,” Beyene said. “We are very much happy that the transaction is concluded. We have five reasons to be happy about: we are working with an internationally renowned brewery. The amount of investment Heineken is going to make. Heineken will contribute to the development of the growing Ethiopian economy by using products from farmers. It is also creating an export market opportunity for Ethiopian products through knowledge transfer.”

Heineken plans to assist farmers and companies engaged in malt production in producing better quality malt. Heineken’s president for Africa and Middle East, Tom de Man, said that his company is committed to developing the breweries. Heineken will continue producing the existing brands of Harrar, Hakim Stout and Harrar Sofi bottled by Harrar Brewery and Bedele, Bedele Special and Bedele Premium.

Johan Doyer, managing director of Heineken Ethiopia, told The Reporter that his company will increase the production capacities of the two breweries on the basis of demand. According to Doyer, the company could increase the production capacity of the factories by 100 percent. Doyer said the management of Heineken will look into the opportunities for building new breweries and a malt factory. Heineken paid 30 percent of the agreed sum to the Ethiopian government in 40 days. 70 percent was paid two weeks ago.

The privatisation authority wants Harrar and Bedele to remain as share companies. But Heineken is not a share company. “We will respect all Ethiopian commercial and labour laws. This is one of the things that we will address,” Tom told The Reporter.

Heineken was first imported to Ethiopia by Solomon Gizaw, a private importer, in 2003. Later in 2010, Kangaroo PLC also started importing the Dutch lager.

Heineken began exporting its products to Africa in 1900 and it built its first brewery in DRC. The company has 30 breweries and two malteries in Africa. It is active in 20 African countries including Nigeria, South Africa and Egypt.

As Ethiopian economy keeps growing in double digits, beer consumption, currently four litters per person per year, is expected to grow substantially. Local demand for beer is growing at 20 percent.

EthiopianReporter