East African Breweries Limited sets up its third plant
A third brewing plant has been commissioned by a subsidiary of East African Breweries Limited in Tanzania, Serengeti Breweries. The idea is to increase sales in a market dominated by South Africa’s SABMiller.
The new Sh5 billion ($55million) plant in Moshi will increase SBL’s production by 55 per cent. The new plant can produce up to 40,000 bottles per hour. East African Breweries owns a 59 per cent stake in the brewer.
Bright prospects
EABL’s group managing director Seni Adetu said: "We have made this investment with confidence in SBL’s bright prospects. It is one of our key future growth drivers."
SBL chairman Mark Bomani called for the removal of non-tax barriers to enhance cross border trade.
"We appreciate that the reduction of common external tariffs and their removal in intra-regional trade makes Tanzania a favourable investment destination," he said.
However, the impact of these benefits is diluted by non-tariff barriers that contribute more to the cost of doing business than tariffs. This is through delays in clearance goods and compliance costs, Mr Bomani said.
Commissioning of the plant comes at a time when the regional market is becoming a battle zone between SABMiller and Diageo-led EABL, as both firms race to increase their footprint in East Africa having parted ways last week.
EABL, through a Sh19.5 billion loan from its majority shareholder Diageo Plc, bought back a 20 per cent stake in Kenya Breweries from its rival SABMiller, ending an eight-year deal that involved the rival firms marketing each other’s products.
The deal also saw East African Breweries sell its stake in Tanzania Breweries Limited.
This article was originally posted on Sustainable Development Africa Platform
Are you interested in Market Research, Recruitment and Business Leads?
Join the Africa Business Panel, powered by Africa Business Communities.
www.africabusinesspanel.com.