Dashen Brewery, the youngest beer factory in the country, is going to plant the second brewery in the central part of Ethiopia around Debre Birhan town, North Shoa Zone of Amhara Region, 130Km northeast of Addis Ababa.
The ten year old brewery, located in the historical Gonder town, 738 kms north of Addis Ababa, has submitted a request for 20 hectares of land with a project proposal sent to the Debre Birhan City Administration in December 2011. Dashen’s administrators plan to build their second beer production centre because they believe the area has a huge potential in the beer market.
It will be the second brewery in Debre Birhan, joining Habesha Brewery Share Company which has already sent a similar proposal to the city administration.
Dashen’s request has apparently been approved according to a city administration official.
Getaneh Zike, Mayor of Debre Birhan, told Capital that the land request was sent to Amhara Regional State two weeks ago for final approval. He says they have already selected two potential convenient plots for the new brewery.
“We expect the final approval from the regional administration by next week,” Getaneh added.
The brewery was established through an endowment from Tiret. When they begin production from Debre Birhan, it will be easy for them to reach major market places in the central part of the country because they won’t have to transport the beer from Gonder. Currently the brewery has been affected by having to transport its beer long distances.
Debre Birhan and its surrounding area are popular because of their enormous barley supply, which is the major ingredient of beer and there is an abundant supply of water.
When Dashen begins beer production from the north-eastern town it will make the endowment firm the second brewery with a branch factory in Ethiopia. BGI Ethiopia is the only company that has three breweries; in Addis, Kombolcha and Hawassa, which was officially inaugurated on January 28.
The resource potential in Debre Birhan is the main reason that Habesha, yet another beer investor in the beer market to plant its first brewery in the area, according to its founders.
Dashen brewery located in Gonder is the first for the northern part of the country, while the under formation Raya Brewery is in the process of building its plant at Maichew town, 662Km north-east of Addis Ababa.
Currently, the board of Dashen, chaired by Tadese Kassa (Tinkishu), CEO of Tiret, is under negotiations with the asset manager of Duet Group, a British consortium, to sell substantial shares.
In September this year, Dashen took part in a bid to acquire Meta Abo Brewery in a joint venture with the asset manager of Duet Group, a British consortium, though their offer was much lower than other bidders. Dashen with Duet had offered 173 million dollars for Meta, which was still twice the floor price.
The two firms are said to have agreed that if the consortium was successful, Meta would be under Dashen while Duet would get 51 percent of Dashen.
Sources recently said that representatives of the consortium had been visiting the brewery on several occasions and also held talks with the management and board of the brewery.
Currently, the two parties are discussing the share percentage and payment that Duet will make.
“Based on the first draft of negotiations Duet is to secure over 40 percent of the brewery shares for over 60 million dollars in payments for Dashen,” sources told Capital recently.
Even though it is young, Dashen established in 2000, has gained a dominant share in the Ethiopian market. Dashen’s subsidiary, Gonder Malt Factory, which will be the second malt factory for the country, is expected to commence its production in the near future.
Duet is a global alternative asset manager founded in 2002 with over 2.4 billion dollars of equity under management as of January 2011 across its hedge funds and real estate and infrastructure investments. The group employs 73 professionals in London, New York, Tokyo, Singapore, New Delhi, Dubai and Istanbul.
Now that the asphalt road has been completed from Addis Ababa to Mekele, land requests for investment have grown in the city administration and North Shewa zone.
According to Getaneh, many medium and large industries are now trying to get involved in the area.
The Mayor said that the demand is growing because of the geographical location of the city.
“When the new asphalt road project that will connect Debre Birhan to Awash is completed, the city will be the closest place to the Port of Djibouti. In addition our city is one of the closest areas to the capital city,” the Mayor added.
In the past fiscal year the government has transferred Harar and Bedele breweries to Heineken, the Netherlands based and one of the biggest breweries in the world, while in September this year the other dominant UK based distiller Diageo won the bid for Meta Abo at the cost of 225 million dollars.
BGI Ethiopia is the biggest brewery in the market with its three breweries, while other new companies are on their way to enter the beer industry.