15 September 2013

Ethiopia: Kenyan-Based, Brookside Diary, Set to Purchase Shares in Elemtu Milk

Brookside Dairy, the Kenyan-based milk processing and marketing company, is looking into buying a 20pc share in Elemtu Milk Integrated Industry, Fortune has learnt. Elemtu Milk is an emerging share company, developing a milk processing factory in Sululta, 25kms north of Addis Abeba, in the North Shewa Zone of Oromia Regional State.

Brookside Dairy collects and processes 750,000lt, which it mostly collects from smallholder farmers, and distributes throughoutKenya,UgandaandTanzania, according to its website.

Brookside Dairy already signed a Memorandum of Understanding (MoU) on July 27, 2013, with Elemtu. This discussed ways in which the two companies could develop the dairy plant, according to Belachew Hurisa, Elemtu's board chairman. The company will start operations as of next November, according to Tesfaye Hailu, director general of the company.

"They [Brookside] sent their lawyers, who deal with us at different times, and we have almost finalised the deal," Tesfaye told Fortune.

The Elemtu Integrated Milk Industry has leased a 20ha plot of land from theSulultaMunicipality, for 1.50 Br a square metre, since 2010. The company has leased the plot for 80 years and is setting up a dairy plant on the seven hectares at a cost of 60 millionBr.

The rest of the land will be used for other purposes, including meat, egg and other food products, according to Belachew.

Established with 35 million Br paid-up capital and 76 million Br authorised capital, Elemtu milk now has 1,517 shareholders. The major shareholder bought a 2.1 million Br share, sources disclosed.

The shareholders include Oromia International Bank (OIB), the Cooperative Bank of Oromia (CBO) and the Oromia Insurance Company (OIC).

Each shareholder is expected to buy a minimum of five shares, each costing 500Br.

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