12 April 2014

Ethiopia: Heineken Seeks for Br700 Million Loan From CBE

Photo: Darren Taylor/VOA
File photo.

- Raya beer secures close to 300 mln birr Nearing the completion of a new Greenfield factory in the capital, the Dutch giant brewer is awaiting the Commercial Bank of Ethiopia (CBE)

to approve a 700 million birr loan request the company submitted, The Reporter has learnt. Sources told The Reporter that Heineken had been looking to get hold of some three to five billion birr since joining the local market in 2011.

However, CBE hesitated to approve such a huge loan, the biggest ever requested by a single foreign company in the history of the beverage industry. After waiting three years, Heineken was forced to cut the loan size down to 700 million for final negotiations with CBE. The 120-million euro consuming factory is set to brew 1.5 million hectoliters a year.

The construction of Greenfield seized some 25 hectares of land on the outskirts of Addis Ababa, a place called Kilinto, near the new correctional facility of the capital. Following the commencement of the new factory, the construction was planned to take 18 months starting in August 2013. Owning some 19 percent share of the market, Heineken first joined the Ethiopian beer industry in 2011 acquiring both the Harar and Bedele beer factories from the government for USD 163 million.

Efforts made by The Reporter to collect comments of Heineken officials bore no fruit since phone calls and e-mail requests were turned down. In a related news, the newly-formed Raya Beer Share Company has pocketed a 279 million birr loan from CBE. Sources said the Commercial Bank approved loan is, of course, less than the 350 million birr Raya was looking for.

Prior to the recent approved loan, Raya was able to amass some 630 million birr loan from some financial institution. Lemma Bekele, general manager of Raya Beer, said that CBE would officially announce the approval of the loan this week.

The construction of the factory has been progressing well according to the recent information officials of Raya Beer have provided. By September, Raya Beer is expected to hit the market with an annual production of 600,000 hectoliters. Currently, Raya has raised its paid-up capital to 600 million birr against 500 last year and currently has accounted for a total investment capital of 1.5 billion birr.

Dawit Gebregziabher, a successful businessman who is well established in the Middle East and is currently here, owns 25 percent of shares by investing 157.5 million birr. BGI, a French-owned beer factory, is the other giant contender owning 42 percent of shares in Raya Beer.

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