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Diageo, the biggest distiller in the world, undertook a massive expansion on Meta Abo Brewery after the company acquired it three years ago.
Debretsion Gebremichael (PhD), Deputy Prime Minister for Finance and Economic Cluster, and Minister of Communication and Information Technology, and Diageo CEO Ivan Menezes inaugurated the new manufacturing line in the compound of the brewery located at Sebeta, 25 km west of Addis Ababa.
The production capacity of Meta Abo Brewery has tripled since Diageo bought the brewery at a cost of USD 225 million.
Currently, the brewery is producing 1.7 million hectoliters beer that is supplied for local and international markets.
According to Meta Abo officials, since Diageo started managing Meta Abo in January 2013, the company has invested USD 344 million to expand its production line.
In the latest expansion, the company had injected USD 119 million. “Ensuring that the brewery can meet future consumer demand and support the introduction of new product, innovations to the Ethiopian market such as Zemen Lager Beer that was launched by Meta Abo in December 2014,” a company statement reads.
A modern German manufactured Krones bottling line technology used by Meta including flash pasteurization, to package products without any human intervention, let the distiller achieve higher quality control and upgrades the brewery’s packaging capacity by up to 50 percent.
“We will continue to invest in the long term growth of our brands, the Meta business, our people and the communities in which we operate, for the benefit of all,” CEO of Diageo said.
According to Francis Agbonlahor, Managing Director of Meta Abo, Meta’s product is available in more than six countries outside of Ethiopia including the US, Germany, France, Israel and South Sudan.
Francis said that the company has established a new export department to handle the export market.
“We will invest more than we invested now,” the Managing Director told the media.
Debretsion said the government insists that breweries should focus on export market, though the local consumption is growing significantly.
This suggestion seemed to take root as a consensus is reached between Diageo CEO and Ethiopian officials including Mebrahtu Meles (PhD), State Minister of Industry to go for foreign markets during a short post inauguration meeting.
“We appreciate this kind of manufacturing sector that has big integration with the agriculture sector,” Debretsion said.
Diageo is working with relevant government bodies to enhance farmers’ capacity aiming to boost input supply.
Currently, Meta is using local farmer’s barley for its beer production. According to Mebrhatu, Meta buys barley from 6,113 farmers in Oromia region.
“Technology transfer and global standard procedures of business conduct are also big contributions for the country,” the state minister said on his speech at the inauguration ceremony.
It is the first time that a Diageo top official had visited Ethiopia. During his three days stay in Addis, Menezes has also met with top government officials and diplomats at the British Embassy.
On his way to Bole International Airport he also enjoyed his night at a small local liquor bar on 27th February.
On the day, Menezes and other Diageo executives, and diplomats from the British Embassy sipped a Jonny Walker spirits brand at a small bar located around Tele Medhanialem area.
Even before the acquisition of Meta, Diageo brands have been popular in Ethiopian liquor market. Meta has introduced two new brands, Malta Guinness – a non-alcoholic international brand, and Zemen Beer since Diageo’s acquisition of the brewery.
On the same day the expansion work was unveiled, Meta also inaugurated its newest community outreach project in Sebeta, water of life, under Meta’s flagship water of life program. Meta has provided 50,000 beneficiaries in Ethiopia with access to clean drinking water in the community support program. The new project will provide clean water to 2,000 households in Sebeta through a borehole.
The UK-based producer and distributor of spirits, wine and beer has market presence in 180 countries and it became the third European company to invest in Ethiopia’s beer industry along with BGI Ethiopia and Heineken.
Meta Abo, which was established in 1967 by the government and private individuals, was producing 500,000 hectoliter beer per annum when Diageo won the Privatization and Public Enterprises Supervising Agency bid.
Currently, the brewery sector is significantly growing not only in market presence but also in the number of producers or investors. According to Debretsion, several investors have interest to join beer and alcoholic drinks production.
Since the giant global producers joined the sector, the beer production and number of brands have increased. Studies indicated that the beer market is not still tapped, even though big producers joined the market.
The local consumption is not more than five liter per head per annum, which is very small compared with other countries including neighboring African countries, according to studies.
Like Diageo, other international breweries that joined the beer industry have also interests to undertake massive expansion.
The other international breweries active in Ethiopia also target to enter into the international markets with their products produced in Ethiopia.