HE INEKEN IN ETHIOPIA
Heineken in Ethiopia invests $150m in new brewery The greenfield facility on the outskirts of the capital Addis Abbaba will add 1.5 million hectolites capacity to the company’s annual production in a fastexpanding beer market Written by: Joel Levy Produced by: Oliver Bishop 3
HEINEKEN IN ETHIOPIA
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Heineken’s Harar and Bedele brewery brands
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eineken Ethiopia is taking its production to the next level with a new $150m greenfield brewery, which will add 1.5 million hectolitres capacity and complement its established facilities at Harar and Bedele. Opening later this year, the new greenfield brewery near the outskirts of Addis Ababa will create new jobs and new opportunities in the region, and increase the availability of the key brands Bedele Special, Bedele, Harar, Hakim Stout and Sofi Malt, while also producing a variety of Heineken global brand’s portfolio. Alongside this, the company’s existing facilities at Harar and Bedele are being upgraded at a cost of $65m, as Heineken seeks to expand its reach and production. Corporate Relations Manager Nebat Sukker said: “We are making good progress with the construction currently taking place and the new greenfield brewery will be operational by the end of this year. “Our capacity is growing from 600,000 hectolitres in 2011 to roughly 2.4 million hectolitres in 2015, and can grow further depending on our needs.” Ethiopia has become a key location for Heineken in Africa as a developing and growing market. A population of 90 million makes it the continent’s second most populated country, and its 4.297 million hectolitre beer market (2012 figures, source Canadian) has grown double-digits over the last years.
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An aerial view of the new greenfield brewery
Long history The latest investment displays Heineken’s longterm commitment, and also represents the latest phase of the Dutch brewer’s long African history dating back more than a century. In 1900 the company was already exporting beer to various African countries including Ghana, Nigeria, Liberia and Sierra Leone; the first brewery in DRC was established in 1923 and it continued to expand across the continent. Taking a major step into Ethiopia in 2011, Heineken acquired two breweries from the government for a combined $163m: the facilities which are currently being modernised. Sukker said: “We are transforming the two companies that we bought from the government from more regional players to national players and the new greenfield brewery is an important element in this plan.
“Our capacity is growing from 600,000 hectolitres in 2011 to roughly 2.4 million hectolitres in 2015, and can grow further depending on our needs” – Nebat Sukker, Corporate Relations Manager
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pressures, perform boiler and burner inspection, repairs and maintenance. Besides Ethiopia Kuiper en Zonen has delivered, inspected and maintained dozens projects Kuiper en Zonen works for a variety for Heineken all over the world. of companies ranging from food, For example, in Burundi we are paper, textile, oil, gas and chemical preparing to install two new industries all over the world. Viessmann steam boilers of 17 They have been delivering new and ton/h at 10 barg each. This order reconditioned turn-key boiler plants includes all piping, commissioning as well as auxiliary equipment in as well as training the operators. Africa since the early 90’s. In addition At this moment we are installing they perform boiler and burner a large superheated water inspection, repairs and maintenance. boiler project in Rotterdam (The Kuiper en Zonen are a unique Netherlands) for a power company. partner to work with as they rent This project will deliver 70 megawatt. out boilers in all capacities and
HEINEKEN IN ETHIOPIA
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Bedele Brewery packaging line
“At both Bedele and Harar breweries, we have invested substantially in line with our business plans, notably in the quality of our processes and systems; in production capacity; in the sustainability of our breweries, as well as in training and development of our staff, which have all contributed to the further development of our brands.” Harar Brewery has invested in a new state-of-the-art waste water treatment plant ensuring that brewery effluent is properly treated, and Bedele and the new greenfield brewery have done the same.
A Ceremony marking the arrival of the brewery’s fermentation tanks
Investing in Ethiopia In meeting the increased demand for malt barley and other raw material created w w w. t h e h e i n e k e n c o m p a n y. c o m
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nigeria
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He inek en B rew er ies Sh a re Co m p a n y Niger i an B rew er ies Pl c B e d ele B rew er y S h a re C o m p a n y B r al im a Bralima
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SUPPLIER PROFILE
REMCO AFRIQUE
Employees: 50 Established: 1972 Industry: The Remco Group of companies consist of various entities in various European countries and is specialised in the construction of production facilities and warehouses for a broad range of industries. The companies are part of Janssen de Jong Groep, one of the leading construction companies in The Netherlands and the Caribbean. Services: The Remco Group of companies offer one-stop-shopping to their clients by providing design, engineering, production and assembly of industrial halls integrated in one company. Over four decades of experience in industrial buildings only assure the availability of proven pre-engineered solutions for any kind of industry. Ongoing Projects: Currently the Remco Group of companies is executing numerous appealing projects in amongst others Poland, Belarus, The Netherlands, Belgium, Surinam and Bonaire. Meanwhile in Africa numerous projects in Ethiopia, Democratic Republic of the Congo, Nigeria, Cameroon and Senegal are in various stages of development and execution. Management: J.F.J. (Jan) van Vulpen, General Manager M.D.J. (Tino) Haze, Financial Manager E.H.D. (Erik) van den Hurk, Tender Engineer Export projects Website: www.remco.nl
HEINEKEN IN ETHIOPIA by the current expansion, Heineken was keen to implement a strategy that would uplift communities at the same time. It partnered with the ATA (Agricultural Transformation Agency) and the EIAR (Ethiopian Institute of Agricultural Research) for a four-year programme named CREATE (Community Revenue Enhancement through Technology Extension in Ethiopia). The company and the Netherlands government committed to invest $2.72 million between 2013 and 2018 to increase food security, improve the livelihoods of smallholder famers and reduce reliance on imports by developing local barley production and connecting farmers to the Heineken Ethiopia supply chain. By 2018, CREATE will have increased direct revenues for 20,000 smallholder farmer families; created 5,000 MT of additional barley for households or the local food market; and 10,000 hectares of land will be under improved malt barley management practices, increasing yields by using better seeds and more adapted farming techniques. Heineken subsidiaries’ dependence on imported products will also be reduced by replacing an additional 20,000 MT of imported barley with locally produced barley. Another Private Public Partnership (PPP) is the Sustainable Water Sources Harar (SWSH), signed last year with the Harar Regional State, Vitens Evides International B.V. and other institutions to
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‘The company and the Netherlands government committed to invest $2.72 million between 2013 and 2018 to increase food security’
Heineken products
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KHS Proudly Supports Heineken
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eineken recently chose KHS as a reliable partner for Africa installing several KHS lines and extensions. The installed lines are located in Pointe-Noire (returnable glass line and syrup room), Kinshasa, Kisangani (partial returnable glass line) and there is a mixer and alcohol storage plant in Ijebu Ode. Further projects will be realized together in the very near future based on the common partnership to ensure Heineken’s growth concept in the region. Heineken is putting its trust in KHS labeling technology with up to 80,000 bph also in Nigeria by ordering 3 new modular labeling machines. This machine technology offers
Heineken breweries a high level of flexibility and future security to cover all possible label decorations. With the KHS Innoket SE modular labeler all modules are interchangeable in the range of cold glue, pressure sensitive and roll-fed modules. The patented modular bottle orientation camera system enables Heineken to produce its containers with outstanding orientation results. One of the latest projects between KHS and Heineken is the implementation of a KEG filling line at the new brewery set-up in Kilinto, Ethiopia. The capability of producing/filling all types of container makes the position of KHS unique in the market.
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HEINEKEN IN ETHIOPIA
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formally commence a sustainable water services project in Harar Regional State. This project is co-funded by the Dutch Ministry of Foreign Affairs through the Sustainable Water Fund. This project will improve water access for 50,000 people, half of which are in deprived rural areas, using water buffering schemes and other supply solutions. As well as contributing $135,000, Heineken will also provide technical expertise. Staff focus This knowledge transfer mirrors to the company’s approach toward its workforce. Heineken in Ethiopia’s staff benefit from numerous training sessions at home and abroad, focused on safety and technical capacity building to ensure
Fermentation tanks at the new Greenfield brewery
SUPPLIER PROFILE
KHS
Industry: Filling and packaging Services: Our core competence lies in the development and production of both single machines and complete filling and packaging lines. Management: Prof. Dr.-Ing. Matthias Niemeyer CEO Contacts: RSA: Joerg.thomas@khs.com / +27 11 262 1100 Kenya: denise.schneider-walimohamed@khs.com / +254 733 611253 Nigeria: michael.kloss@khs.com / +234 70 9800220 Website: www.khs.com
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HEINEKEN IN ETHIOPIA
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Farming techniques in Ethiopia are centuries old
business processes meet the strictest standards. Heineken Group specialist technicians also attend to train staff in other key areas including marketing, sales and IT. Additionally, technical operators (green teams) visit from various operating companies overseas to facilitate trainings and transfer knowledge. The Bedele brewery, for example, is currently hosting a South African green team. “We have also sent our employees to other operating companies and equipment suppliers on the continent and in Europe for training. We benefit from the experience and knowhow from an international company, where we exchange best practises,� added Sukker.
In Ethiopia barley is grown for food and malting purposes
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HEINEKEN IN ETHIOPIA
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Most smallholder farmers own about five Hectares of land
Making a difference On the sustainability side, a dedicated 10-year programme, launched in 2010, named Brewing a Better Future (BaBF) is another area of specific attention. Sukker explained: “BaBF focuses on four key areas where we can make a difference: protecting water resources; reducing CO2 emissions and energy consumption; sourcing sustainably and advocating responsible consumption. “Each of these areas is highly relevant to our day-to-day business operations, and to our stakeholders. We have already seen considerable
“We are transforming the two companies that we bought from the government from more regional players to national players” – Nebat Sukker
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HEINEKEN IN ETHIOPIA
Harar Brewery
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Heineken training programme ensures a high level of safety and technical understanding
improvements on most of these KPI’s (Key Performance Indicators) in our breweries.” Heineken has also been active in improving healthcare. In 2013, the Heineken Africa Foundation committed $145,000 to upgrades at Bedele District Hospital in addition to $100,000 from Bedele Brewery SC and the $90,000 contributed to The Finkele Health Clinic project, focused on obstetric care. The brewery has already provided an ambulance, new medical and laboratory equipment, and 55 people have been trained for the centre in collaboration with African Medical and Research Foundation (AMREF). Spreading the word Heineken’s future plans in the country involve
“We want to become a major player in the industry by surprising and exciting our consumers with a great portfolio of brands, and by being a partner for growth in the communities in which we operate” – Nebat Sukker
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HEINEKEN IN ETHIOPIA
Patients and staff at Bedele District Hospital
Through the Heineken Africa Foundation, the company has heavily invested in local healthcare 22
a focus on the further development of its supply chain. “We are very much involved in increasing the opportunities to source locally and are focused on our commitment to buy locally. We have local and global suppliers, Heineken approved, and we are trying to attract specialists to further develop the local supply chain,� Sukker said. Such progress is necessary to stay ahead of the game in a rapidly developing market with an increasingly discerning clientele who demand
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Company Information INDUSTRY
Beverage HEADQUARTERS
Addis Ababa, Ethiopia FOUNDED
2011 EMPLOYEES
1,100 REVENUE
Not disclosed PRODUCTS/ SERVICES
the best. With its huge investment, this is exactly what Heineken in Ethiopia will be able to offer. Sukker concluded: “We are seeing more competition, faster growth in the market, more demand from customers, as well as more branding and marketing. “We want to become a major player in the industry by surprising and exciting our consumers with a great portfolio of brands, and by being a partner for growth in the communities in which we operate.”
Bedele Special, Bedele, Harar, Hakim Stout, Sofi Malt, Heineken brands
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HEINEKEN IN ETHIOPIA Kirkos Sub City, Woreda 06 Yezelalem Building, P. O. Box 15526, Addis Ababa, Ethiopia Tel. +251 (0) 11 4 70 30 20 hbsc.info@heineken.com www.heineken.com