Company to double production
The first international wine brand in Ethiopia which has placed the nation among global wine producing countries, Castel Winery, plans to double its production through its latest 12 million euro expansion, which will take two and a half years to complete. It is also introducing the first Ethiopian ‘bag in box’ wines.
Alemtsehay Bekele, Sales and Marketing Director of Castel Winery, told Capital that the company is already expanding its farmland at Battu (Zeway), Oromia region, 163km south of Addis Ababa. An additional 85 hectares of land will be used to cultivate new vines.
The winery currently grows grapevines on 162 hectares of land and produces 1.4 million bottles of wine annually both for the local and export market. She said that the production will be increased to 2.8 million bottles once the company finishes the expansion.
Castel is a leading French wine maker and one of France’s prominent global brands. It introduced its products in Ethiopia about 30 months ago.
Castel Winery, which is under the French based corporation, Castel Group, is exporting the Ethiopian wine to 11 countries on different continents.
On Thursday December 15 the company officially introduced new kind of wine packaging to the country. “The new ‘bag in box’ (carton) wine packaging, which was previously dominated by imports, should be able to beat competing wine brands coming from abroad,” Alemtsehay said. The company has installed an extra 20,000 euro production line to introduce the carton wine. She said these wines are cheaper than bottled wines because the packaging costs less.
Two types of wine, Acacia Medium Sweet Rosé and Acacia Medium Sweet White, will be the first to be packed in the 2.5 liter ‘bag in box’ packaging. Within three months, Acacia Dry Red and Acacia Medium Sweet Red will be included as well.
According to a Castel official, when the red wines are included in the coming few months all the Acacia products will be available on the market with the ‘bag in box’ varieties in addition to bottled packaging.
“The Rift Valley Range will be also introduced in the future,” the marketing head of Castel explained during the press conference held at Ramada Hotel.
She said that consumers will be able to choose among three and five liters in volume. Based on the company’s plan the carton package will take 25 percent of the total production.
The ‘bag in box’ wines are much in demand in the market because it is easy to serve them in bars and hotels. Currently the bags are imported from France since there is not a local producer here in Ethiopia.
The carton packed wine will be exported to the regional market.
“Due to lack of refrigerated shipping the ‘bag in box’ wines will not be exported to market destinations that are far way. In some cases the product will be transported by air freight, which is more expensive than ship cargo,” she said. Other fresh product exporters are also looking at a frozen cargo scheme for their export market.
She added that businesses in Uganda and South Sudan are asking for the carton packed wines, and they also plan to target regional markets.
Alemtsehay said that the company is in the process of introducing small bottles (18.75 cl) of wine for in-flight service, which will enable Ethiopian Airlines to replace their imported products on their flights.
Currently 16 percent of their 1.4 million bottles are exported.
“We are looking to expand the export market because our wine has become popular in places like North America and Europe,” she added. The bottled wines are being enjoyed on five continents.
Besides supplying the product the bottler is also working to popularize wine serving in the hospitality sector and educational facilities who train hotel professionals.
The four types of grapes Castel Winery currently grows to produce red and white wines are Syrah, Merlot, Cabernet Sauvignon and Chardonnay.
The Group is the largest wine producer in France and Europe and one of the three largest wine producers worldwide.
So far the total investment in Battu is 25 million euro, and the latest expansion will boost its investment capital.
Castel Group, which has helped demonstrate the potential of Ethiopia’s beverage industry globally, is a pioneer foreign company that has also invested in the beer industry.
Currently, Castel produces ten varieties of wines on the two production ranges: Acacia Dry Red, Acacia Medium Sweet Red, Acacia Medium Sweet White, Acacia Medium Sweet Rosé, Rift Valley Merlot, Rift Valley Syrah, Rift Valley Cabernet Sauvignon, Rift Valley Chardonnay, Rift Valley Cuvee Prestige (Chardonnay), and Rift Valley Cuvee Prestige (Cabernet Sauvignon- Merlot)
The birth of Castel Winery was officially launched in May 2007 at a ceremony for the first vine plantation. It secured 450 hectares at Battu, which has a favorable climate for making wine. As per its initial plan Castel is expected to expand even more in the coming year to fill the growing demand for quality wines.
Through its subsidiary BGI (Brasseries et Glacières Internationales) Ethiopia it joined the Ethiopia beverage industry after deciding to erect a brewery at Kombolcha, Amhara Regional State 376km north east of Addis Ababa with a USD 25 million investment in 1997 and then it bought the long established brewery, St George, in 1998 at a cost of USD 10 million and also undertook massive expansion in addition to the new plant in Hawassa, 273km south of Addis Ababa.
Since then the French based giant, that is demonstrating the benefits of doing business in Ethiopia to other global investors, has played a big role in promoting the beverage industry in the country and has become an example for other dominant foreign firms to be part of the country’s development by establishing their business in Ethiopia.
Castel Group was established in Bordeaux, France in 1949 by founder Pierre Castel and his 8 brothers and sisters.