Belgium Becomes Latest Buyer into Burgeoning Brewing Sector

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Unibra have been active in the African beer market since they were established in 1960

Unibra, a Belgium-based company, has agreed, on March 4, 2014, to take 60pc ownership of the Zebidar Brewery – one of the latest entrants into Ethiopia’s beer industry – after eight months of negotiations with Zebidar-Hulegeb Industry SC.

The Belgium-based company, which has operated in the African beverage market since its establishment in 1960, through the merger of four breweries in what is now the Democratic Republic of Congo (DRC), currently produces 100,000hl of beer.

Zebidar Hulegeb has changed its name to Jemar Hulegeb, according to part of the agreement signed at the headquarters of the Ethiopian Investment Agency (EIA), located opposite the Dembel City Centre, in the Olympia area of Africa Avenue, and owns 40pc of the jointly owned Zebidar Brewery SC.

Another part of the agreement concerns the shareholding between Unibra and Jemar Hulegeb. The latter planned to sell 50pc of its shares in Zebidar. However, Unibra came up with a minimum requirement of 51pc.

“It took eight months to reconcile the differences and reach 60pc,” says Taddesse Abzaw, general manager of Jemar Hulegeb.

Zebidar, which plans to start producing 300,000hl of beer after September 2015, will have five board members, two from Jemar and three from Unibra.

Unibra will also provide a project manager, business coordinator and marketing coordinator for the Brewery.

Zebidar is currently conducting a topography survey, water drilling, site clearing and civil work design to erect the brewery on the 150,000sqm plot it has taken from the Southern Region, in Gurba – 12km from Wokqite town, Guraghe Zone (158km from Addis Abeba). The location was selected because of its immediate market centre of Welqite town and proximity to other dominant centres like Addis Abeba, Jimma (346km from Addis Abeba), Hosanna (185km from Addis Abeba), Woliso (114.8km from Addis Abeba, Butajira (130km from Addis Abeba) and Zeway (163km from Addis Abeba).

The Brewery will have a capital of 800 million Br, out of which 350 million Br is contributed by both Unibra and Jemar and 210 million Br is contributed by Unibra. Jemar contributes 140 million Br, whereas the remaining 450 million Br will be obtained through bank loans.

“We expect to receive technical and marketing assistance through partnering with Unibra,” Gebru Habtewold, chairperson of Jemar, told Fortune.

Unibra is one of the founders of the Skol Beer brand, established in 1964. It operates in six countries. Skol is the third largest beer brand in terms of volume. Unibra owns Skol in Africa. The company also entered the Rwanda market in 2010.

Zebidar is set to enter a beer market that is still relatively undeveloped. Ethiopia’s average annual beer consumption stands at five litres per person, while Kenya’s is 12 litres.

BGI Ethiopia ranks first in the Ethiopian beer market with a 48.25pc market share. The Heineken and Dashen Breweries trail behind in second and third, with an 18.75pc and 18pc, respectively. Diageo Plc comes last with 15pc.