Beer Production Set to Increase

By WUDINEH ZENEBE - FORTUNE STAFF WRITER

31 August 2006

Meta Abo Brewery is starting a 90 million Br expansion project. Meta Abo is one of the three government breweries in the country and has a current production capacity of 400,000 litres annually. The expansion project is expected to increase its annual production by 40 per cent.

The expansion project was approved by the Privatisation and Public Enterprise Supervising Agency but was delayed as negotiations were underway between the SESPA and the Kenyan East African Breweries to work on a joint venture with Meta Abo.

During the negotiations East African Breweries was set to own 50 per cent share of Meta Abo above which it was asked to invest in the total capital of Meta Abo to enter into a deal.

The negotiations later failed and the funds for the expansion project were released in June 2006. Following this, last week Meta Abo issued a tender to buy new machines and replacements for old ones.

Wondafrash Assefa, Public Relations officer of PPESA, told Fortune that the agency releases funds to build the capacity of companies under it and that the funding was released for this particular project for reasons unrelated to the failed negotiations with East African Breweries.

Meta Abo, Harar and Bedele are government owned breweries, where Dashen and BGI are privately owned.

Of the two private breweries, Dashen has finalised an expansion project worth 100 million Br in October 2005. Dashen has projected an increase of its production capacity from the current 26.2 million litres to 75 million litres annually at the end of this fiscal year.

Harar beer will finish its expansion at a cost of 80 million Br by the end of this month. Harar beer produces 70 million bottles at full capacity annually and with this expansion project it expects to raise this by 50 per cent.

Bedele Beer does not have any expansion plans yet. According to marketing experts the demand in the local consumption of bottled beer and draught beer has increased by two fold.

Solomon Kebede, General Manager Meta Abo Brewery told Fortune that the brewery distributes its beer on a quota system. As production will increase after the expansion, they will be able to fulfil public demand for its beer.