Ethiopia: Tiret Shells Out 670 Million Br to Construct Local Malt Factory

Addis Fortune (Addis Ababa)

Hadra Amed

12 July 2011

The Gonder Malt Factory, owned by Tiret Endowment Investment Organization, has announced that it will start producing malt by December 2011.

The factory, located in Gonder which is 658km from Addis Abeba, has started constructing a malt factory adjacent to Dashen Brewery, investing 670 million Br. The factory covers an area of four hectares and will soon be open for production.

The factory, when complete, will be the second malt factory producing 15,000tn of malt annually, of which 10,000tn to 12,000tn goes to its affiliate, Dashen Brewery. The lone malt factory in Ethiopia, Assela Malt Factory, located 164km from the capital, is up for auction by Public Enterprises Supervising Agency (PPESA). It was established in 1984 with a start-up capital of 9.2 million Br.

Construction, being done by Afro Tsion Construction Plc, has seen 40pc of the construction complete, Tadesse Kassa, CEO of Tiret, told Fortune.

Tiret is an endowment established in 1995 in Amhara Regional State by pooling resources under the Amhara National Democratic Movement (ANDM) and the ruling coalition, EPRDF. It administers five companies: Tikur Abbay Transport Plc, Dashen Brewery Plc, Ambasel Trading House, Zeleke Agriculture Mechanisation, and Belesa Logisitcs & Transit.

The organisation foresees itself playing a meaningful role in the development of the region by 2020, by creating a fortune of 20 billion Br, claims the company’s profile.

“We are planning to minimise the amount of malt that is being imported from Europe, Kenya, Sudan, and other countries,” Tadesse said. “Close to 20,000tn of barley will be bought from farmers in Gojjam as well as parts of Gonder’s and Amhara’s barley growing regions, and 65pc of it will produce malt.”

“We believe this factory will be helpful in generating revenue for the farmers and will provide enough malt for the breweries,” Tadesse said.

The total demand of malt in the country is estimated to be 61,504tn a year, with Assela Malt Factory producing 22,500tn a year.

To date, the 33,430tn of malt imported in 2010, was valued at 301.3 million Br, with 25,000tn, 5,750tn, 2,010tn, and 670tn imported from Belgium, France, Germany, and the Netherlands, respectively, according to the Ethiopian Customs and Revenues Authority (ERCA).

However demand for malt is expected to reach 42,912tn this year. The demand is expected to reach 86,542tn by the year 2020, according to the Central Statistics Authority (CSA).

There are around five major breweries in Ethiopia: BGI Ethiopia, Dashen Brewery, Meta Beer, Bedele Beer, and Harar Beer. This year, they projected a total of 64,579tn of malt, 22,500tn and 42,079tn from domestic and imported sources, respectively. The unsatisfied demand of malt will grow to 64,041tn by 2017, according to CSA.

Tiret announced an international tender where 15 companies showed interest, including companies from the Czech Republic, Greece and Germany. The company has already signed a contract for the supply of machineries priced at 17.1 million dollars with a Buhle GmbH, German company, winning the other five tenders that made it to the final with its price and proposal.

“The factory plans to provide malt to all the breweries in Ethiopia and export it to other countries,” Tadesse said.

“It is going to be helpful for Raya Brewery because it is going to minimise the transport costs as well as the inventory costs,” says Lemma Bekele, manager of Raya Brewery.

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