East Africa: East African Breweries to reduce costs by turning to sorghum

East African Breweries Limited (EABL) is turning to sorghum for brewing in an effort to cut its reliance on the more expensive barley, The Business Daily reported on March, 17.

The prevailing high cost of agro- based raw materials led by barley and malt played a part in slowing down the earnings of the listed brewer, and the firm is now focusing its efforts on cutting costs amid the sluggish growth of beer consumption.

“Aggressive cost management will be our 2009 agenda, especially reduction of raw materials costs,” Mr Gerald Mahinda, the managing director, said while unveiling the firm’s half year results last month.

In the six months to December, the brewer saw the cost of barley and malt rise by about 60 per cent, as it turned to imports due to insufficient production by local farmers.

EABL is now preparing to modify some of its raw materials in partnership with Equity Bank and local farmers.

With cereal prices expected to remain high on the international market, the brewer is now diversifying its cereals raw materials to include sorghum, it is reported.

18 March, 2009