Magazine article African Business

New Beer Plant to Fight Imports

Magazine article African Business

New Beer Plant to Fight Imports

Article excerpt

East Africa's breweries are undergoing major expansion at a time when South African beer is causing havoc in the market. Leo Odera Omolo reports on the latest move in the regional chess game.

A Capital Brewery Ltd (CBL) beer plant is currently under construction in the new Tanzanian political capital of Dodoma and will soon start bottling Kenyan made beer under licence in a bid to stem the tide of South African imports to the region and take advantage of high demand in Tanzania. The operation and production is expected to begin in the second half 1996, raising Tanzania's overall beer production capacity to 10.1m crates per annum.

The Executive Chairman of the JV Group which owns Capital Breweries, Mr Girish Chande, said that the $35m CBL plant which is expected to employ 500 people, will be commissioned in October, and will start by producing 1.6m crates of Kenyan beer brands per year.

Recent market surveys indicate that the demand for beer in Tanzania stands at 20m crates per annum. Mr Chande said the prices of CBL bottled Kenyan beer "won't be much different from those of Tanzania Breweries Ltd."

"We are regarding this project as an excellent and concrete example of East African cooperation. Kenya Breweries have been fully involved in all technical decisions taken to date and will continue to be involved during, the implementation of the project." said Mr Chande.

He added, "subject to their board approval, Kenya Breweries might participate in the equity of the company". The brewery will be constructed in three phases commencing with the bottling plant ready for October.

The second phase will take another 12 months and will be the construction and equipping of the brewing section with an initial capacity for another 1.6m crates per year, thus doubling production to 3.2m crates per year.

The third phase will cover the construction of another bottling plant in Mbeya, Southern Tanzania which is expected to help realise the company's production target of 6.4m crates per year by late 1998. …

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