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East Africa Bottling Share Company (EABSC) has inaugurated a massive expansion to its Dire Dawa branch at a cost of 20 million dollars. This investment is part of EABSC’s plan to invest 500 million dollars in Ethiopia by 2020.
The new expansion, which fully replaced the oldest production line, has expanded the previous production capacity by five fold.
Greig Jansen, Chief Executive Officer (CEO) of EABSC, said that everything is being replaced with a brand new satellite technology “and the great thing is that we have been able to recruit and expand the capabilities of people in this area and lift the whole school base in the technology that exists in Dire Dawa”.
“The other great thing is with this line we have increased our capacity five times from the old line we had here. We used to be able to make 5,000 crates a day. Now it is 25,000 crates a day, hopefully 30,000 but 25,000 for now. We are very excited about it; it is the first of our investments for Dire Dawa,” he added.
“As it goes on we think we can put another line, which is going to be another 12 million dollar investment. We spent 20 million dollars, and now we need to sell some coca, get some money in and then we can look into investing further,” Jansen explained.
Currently, the government is interested in making Dire Dawa a city focused on manufacturing. In line with this, the federal government has signed a deal with a Chinese consultant firm to form the first special economic zone in the country in the eastern city, which is the closest to Djibouti ports and is fully organized in terms of infrastructure. However, officials or representatives of the city administration did not attend the inauguration of this massive expansion project.
“We find that wherever we invest is an indication for other international companies to come and invest as there must be something good there,” the bottler CEO said, explaining how much Coca Cola’s presence encourages and attracts other investors.
According to data from the city administration, the latest Coca Cola investment is one of the biggest investment for the city administration in terms of volume and cost. The other major investment for the city in the past few years was the expansion project of the National Cement factory.
“As Coca Cola, we are bringing half a billion dollar to Ethiopia,” the CEO announced. This is part of it. Officials said that the company has invested 150 million dollar to date.
Currently, most civil works of Coca Cola’s expansion projects are carried out by Elmi-Olindo, with the other prominent Italian firm, Sidel, involved in the supply of machinery. Both companies are expected to undertake similar projects in other parts of the country, such as Bahir Dar, the capital city of the Amhara regional state. .
“The next place is Bahir Dar, we got the land from the government and in about two months time we will start construction. It is all about supporting the government’s five year economic development plan, because we really believe in Ethiopia, and there is great potential for us, as you know, 100 million people shortly,” Jansen told journalists at the expansion project inauguration ceremony held in Dire Dawa.
In Bahir Dar, the company got 20 hectares of land. The budget for the Bahir Dar project is 35 million dollars. There will be two lines going in, one for glass and the other for plastic bottles. “We will start the work in about two or three months time,” he said.
In 12 months time the factory will be up and running. The glass line capacity will be the same as Dire Dawa, the plastic line will be the same as in Addis. Overall, they will be able to produce 100 thousand crates per day in Bahir Dar.
According to Coca Cola officials, the new production branch in the northern Ethiopia city is a great location for the company to move into the north. Currently, the company is transporting the product to the north from its Addis Ababa and Dire Dawa branches.
East Africa Bottling Share Company, Coca-Cola’s independent bottling franchise and a subsidiary of South Africa Bottling Company (Sabco) has invested 70 million dollars (1.3 billion birr) to boost capacity at its plants in Addis Ababa and Dire Dawa.
The investments constitute part of the company’s commitment to investing 500 million dollars in Ethiopia by 2020, and comes at a time when the company is positioning itself for increased growth in the consumption of its products to take advantage of what is widely seen as the exponential growth of the Ethiopian economy.
The Addis Ababa line, a PET recyclable packaging line will enable the company to produce one way packaging for the first time in the Ethiopian market, while the Dire Dawa investment, a glass line, has increased production capacity five-fold. The investments are in line with the company’s strategy to gradually and sustainably increase its capacity so as to meet the growing demands of its brands, deepen access to trade and consumers, thereby driving market penetration, affordability, recruitment and transactions.
“Ethiopia remains one of our top 10 markets in sub-Saharan Africa, and with a population of over 90 million people we truly believe that this country represents the future for our business,” said Jansen.
The PET line at the Addis Ababa plant was built at a cost of 50 million dollars and involved a complete upgrade of the plant’s services and auxiliary equipment.
The company stated that as part of the investment in its business it will also be working with local communities to launch recycling and environmental management initiatives, which form part of Coca-Cola’s sustainable business model.
The 500 million dollar investment, which the company launched in April 2012, to be completed by 2020 includes three new plants, including one in Hawassa and another one in western Ethiopia, whose construction depends on the performance of the company’s other lines.
EABSC pays over one billion birr in tax to the government every year.