E-Malt.com News article: Ethiopia: Habesha contracts Chinese firm Lehui Food Machineries Co for design and commissioning of new brewery

Lehui Food Machineries Co, a Chinese company, was selected for the design and commissioning of the factory of Habesha Breweries on June 24th, Addis Fortune reported on June, 26.

The contract for the factory, to be built on 75,000sqm of land in Debre Berhan Town, 130km north of Addis Ababa, was awarded on a turnkey basis at a total cost of 30 million dollars. The factory’s site has abundant water resources and barley production.

Ziemann Ludigsburg from Germany and Techno Expo International Business Co from the Czech Republic participated in the bidding process.

“We made the decision after 30 days of deliberations,” said Yonas Alemu, CEO of Habesha Breweries. “We also visited China for 15 days to study the company’s track record, set up, capacity, and manpower.”

A total of 16 companies initially showed interest in the turnkey project of which eight submitted technical proposals. Eventually, the three were shortlisted.

The winner is expected to start discussions with Habesha on the implementation of the project this week with the contract expected to be finalised in two weeks, according to Yonas.

Habesha has slated a 13-month timeframe for the completion of the project.

“We expect the critical machines to come from Europe; and the basic engineering machines, such as cyclo-cylindrical tanks, to be from China,” Yonas told. “The raw materials are expected to be sourced from both locally and abroad.”

The factory plans to produce about 300,000 hectolitres (hl) annually with plans for eventual expansion to 500,000hl, the CEO claimed. The factory plans to employ about 350 employees upon becoming operational and export 20pc of its products mainly to Israel, North America, and the soon to be independent state of South Sudan, according to Yonas.

“To date, the company has sold more than 150 million Br worth of shares to the public, reaching 7,628 shareholders,” Yonas told. “We plan to achieve 15pc to 20pc of the beer market share upon becoming operational.”

Habesha Breweries signed a deal with AMS Beverage Engineering, a German consulting company, for the consultancy of the construction of the factory at a total cost of 10 million Br, in February 2011.

The beer market in Ethiopia is currently served by five breweries. These are Meta Abo Brewery, Bedele Brewery, BGI Ethiopia, Harar Brewery, and Dashen Brewery. The private owned BGI Ethiopia has around 50pc of the market share.

Ethiopia’s annual beer consumption has been growing at an average of 24pc, according to research done by Access Capital in 2009. Even though the estimated consumption of four million hectolitres in the country roughly translates into five litres per person annually, it is well below the average consumption of neighbouring Kenya (12 litres) and South Africa (59 litres).



29 June, 2011