East Africa Bottling Receives First Trucks for Fleet Expansion
East Africa Bottling SC Coca Cola has received seven IVECO 380 trucks it bought at a cost of 23 million Br from AMCE as part of its 107 million dollar expansion plan for the next five years.
The trucks were bought for three million Birr each after the people who had initially ordered the trucks changed their minds about the purchase while they were in transit and the trucks were left at Djibouti Port.
East Africa paid an additional two million Birr for the construction of the bodies of the trucks, which AMCE had contracted out to Maru Industry Metals Plc. They are still being assembled in AMCE's compound in Bole Sub City, Wereda 12.
These trucks will be able to carry 1,700 cases of Coca Cola products, according to Grieg Jansen, managing director of the bottling company.
"Strengthening the fleet management of the company is part of the expansion project," he told Fortune. "The seven trucks are the first of 20 delivery vehicles, the remaining of which are to arrive over the next 12 month
Aside from the fleet, the expansion includes opening more plants in Ethiopia and expanding the existing ones.
East Africa Bottling has seen continuous expansion since it was restructured to its current format in May 1995, after businessmen bought the factory from the Privatisation and Public Enterprises Supervising Agency (PPESA) for 10 million dollars.
The original shareholders - Negussie Hailu, Munir Duri, Bereket Haregot, Kassim Hussien, and a fifth shareholder, have since sold all or part of their shares to newcomers. Now 73pc of the company is owned by the South African Beverage Company (SABCo), while Negussie, Munir, Dereje Yesuwork, and Abinet G. Meskel own the remaining 27pc.
The expansion project at the Dire Dawa plant, which lies on 1,200sqm, was started close to three months ago. The construction, which is expected to cost around 14 million dollars, is being done by Elmi Olindo & Co, a general contractor that was established in 1945. The design, the standard one used by Coca Cola for its plants, was altered to suit local conditions by Yerer Constructing Plc, which was established with a total capital of 1.5 million Br, in 2002.
To date, the construction of a waste treatment plant, with a budget of 2.5 million dollars, has been completed.
"This is our first waste treatment plant and forms part of our corporate social responsibility (CSP) and has an aquarium," Jansen told Fortune. "It forms part of our 5.5 million dollar plan for waste treatment plants on other sites."
The expansion of the Addis Abeba plant, which is projected to cost 16 million dollars, is slotted to start by 2012.
The company, which bottles Coca Cola, Sprite, as well as Fanta Orange and Ananas (Pineapple), introduced Coke Light in September 2008. However, the scarcity of foreign exchange at the time rendered the company unable to follow through on its planned marketing campaign.
In March 2009, it closed its plants for almost three weeks due to being unable to import raw materials. Only after Commercial Bank of Ethiopia (CBE) agreed to provide 1.8 million dollars to facilitate the company's importation of raw materials, production was resumed.
The expansion of the two sites follows extensive market research conducted by Coca Cola, in 2008, on which it based its plans for expansion that include franchise branches in 12 countries, located mainly in Africa and Asia, according to Jansen.
"Special attention has been given to Ethiopia and Vietnam," he told Fortune. "The company plans to create a major boost with a Coke Light marketing campaign in January 2011."
Although the managing director was unwilling to disclose the company's annual production capacity, it is set to increase to 1000 million case units (crates), one of which holds 24 bottles, according to sources inside the company who were not authorised to comment.
In 2009, it had a capital of 400 million Br with a production capacity of 21 million crates per year.
This article was originally posted on East Africa Business Communities
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