Raya Brewery SC is to begin the first phase of its expansion project with 75 million birr budget. The expansion will boost the company’s current production which is 600,000 hectoliters a year by 25 percent.
The company has already ordered brewery equipments from a Chinese company, Lehui Group, a global brewery equipments manufacturer. The supply by Lehui includes brew house and fermentation and storage tanks.
The Chinese company will also be responsible for the installation and commissioning of the equipment, according to Tewolde Asfaw, CEO of Raya Brewery SC.
Currently, Raya’s fermentation and storage tanks have a capacity to store 18,000 hectoliters. The new expansion will add 6,000 hectoliters
It has been two years since Raya entered the Ethiopian market and the beer is now gaining acceptance in Tigray Regional State, north part of Amhara Regional Stare and some areas of Afar, the CEO said.
“We could not push to other markets with the current capacity we have,” he said. “So the expansion will definitely help us to expand into more new markets.”
The company is also exporting its product to Israel.
Raya was established by 58 founding shareholders. The board of directors is chaired by Tsadkan Gebretensae (Lt. Gen.), the former chief of staff of the Ethiopian National Defense Force. Its factory is located in the historic town of Maichew, 662km north of Addis Ababa.
Last year the company has reported a 104 million birr loss. By the same time the company has stated that it improved its gross sales by more than three-fold, reaching almost half a billion birr in the last fiscal year.
By the time of the reporting year, the company has expressed its limitedness to aggressively reaching into wide markets such as Addis Ababa.
The expansion projects of the company which is done in two phases will increase the company’s capacity to 1.3 million hectoliters, a year. The first phase is expected to be completed within four to six months.
The first phase will be financed by the company where as Raya will require loan from financers to execute the second phase of the expansion.
Raya’s total long-term bank loans increased has already 815.14 million birr, according to last year’s financial report. The report has also indicated that its total assets reached to 1.607 billion Birr. From this, 1.295 billion Birr was invested in property, equipment and leasehold land.
The Ethiopia’s brewery industry is growing from time to time so does the per capital consumption. It is attracting new players into the market and the existing ones are expanding their capacity.
Just this year, Zebidar Brewery SC has entered the Ethiopian market; it become the seventh Ethiopian brewery with a production capacity of 350,000 hectoliters
Again just last year, factories such as Dashen Brewery have invested close to two billion birr in a new plant in Debre Birhan town, which is now operational; Diageo-Meta finalized its own expansion at a total cost of 780 million birr, boosting its production to 1.7 million hectoliters
The market is now believed to have 12 million hectoliters of production capacity; with the two latest expansion project by Raya the number will reaches to 12.7million hectoliter.
With the growing industry, Ethiopia’s per capita consumption has also increased. In 2013, the figure was at five liters while latest reports show that is has now escalated to eight liters.