EABL bets on Sh15bn Senator plant as demand soars

EABL bets on Sh15bn Senator plant as demand soars
President Kenyatta, Diageo CEO Ivan Menezes look on as Sh15bn investment agreement for a new Senator plant is signed

East African Breweries Limited (EABL) has announced plans to set up a Sh15 billion plant in Kisumu to manufacture its low cost beer, Senator.

The new plant, whose construction starts next month, is expected to be up and running by 2019, as the brewer seeks to meet demand for the popular beer brand.

EABL has been witnessing declining sales of its bottled beers which shrunk 0.3 percent in Kenya in its half year performance.

However the Senator brand continues to prove an exception, growing by 13 percent during the same period and showing promise in markets such as Uganda.

Diageo Global chief executive officer Ivan Menezes who made the announcement jointly with President Uhuru Kenyatta said the investment underscores the strategic positioning of Kenya in the firm’s growth plans.

“This investment in a new brewery for Senator Keg underlines our long-standing commitment to Kenya. This announcement now brings our incremental capital investment to Sh30 billion over the last five years and further deepens our relationship with Kenya which has now spanned 95 years,” Mr Menezes said.

Diageo owns a 50.03 percent stake in EABL, which is listed on the Nairobi Securities Exchange.

The investment is seen as a major boost for sorghum and millet farmers with EABL keen to contract farmers to produce Senator beer.

EABL, through its subsidiary East African Maltings Limited, currently has 30,000 contracted farmers and plans to grow the farmer base to 45,000.

President Kenyatta hailed the investment, adding it would provide job opportunities as well increase earnings for farmers.

“I am pleased today to announce that Kisumu is next in line to receive record-breaking new investment that will change the lives of our farmers and our young people. This investment valued at Sh15 billion will result in a modern, state-of-the-art brewery will see at least 110,000 Kenyans derive a source of livelihood,” President Kenyatta said.

EABL currently spends an estimated Sh2.2 billion annually purchasing millet and sorghum from farmers, but expects this to rise to Sh6 billion over the next ten years.

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