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Tuesday, 13 January 2015

Heineken eyes Ethiopia for beer market growth

Heineken is betting on Ethiopia's rising incomes to fuel rapid expansion of the beer market in Africa's second most populous country, where the group is the first of the big international brewers to build a new plant.Ethiopia's average annual beer consumption of some 5 litres per capita is about half the average level for sub-Saharan Africa, excluding South Africa, offering scope for expansion among the population.It's a country, where as a brewer, you believe you should be thereHeineken's African and Middle East regional president Siep Hiemstra said in an interview on Monday that Ethiopians were used to fermented drinks and also grew barley, used in beer making. "It's a country, where as a brewer, you believe you should be there ... One can expect that there will be rapid expansion of the brewing industry," he said.

Ethiopia's economy is expanding at about 9 percent per year, sturdy growth that led to its debut $1 billion Eurobond being oversubscribed last month. The world's major brewers have turned to emerging markets such as Africa for growth because consumer spending in Europe is sluggish and the United States offers only limited expansion opportunities.Heineken is the market leader in Europe, responsible for half of group revenue and about a third of its operating profit in the first half of 2014.But the company has significant exposure to Africa, Latin America and Asia.Heineken has bought numerous plants in Africa and built two, one in Nigeria in 2000 and another in South Africa in 2008.It has been gradually ramping up its new plant in Ethiopia since July.The 110 million euro ($130 million) brewery, with a capacity of 1.5 million hectolitres, is the largest in the country and located near the capital Addis Ababa.

Source: theafricareport.com