Boortmalt a subsidiary of France’s largest grain cooperative, Axéréal, is going to open the third malt processing plant of the nation with a 1.6 billion Br investment.
Boortmalt, one of the top five malt producers in the world, processing over one million tons of malt annually, will reside in Debre Birhan Industrial Park (DBIP), 130Kms northeast of Addis Abeba, in Amhara Regional State. It has already secured a 15ha plot in the park to set up its processing plant.
Brought through the advocacy of the Ethiopian Agricultural Transformation Agency (ATA) and the Ministry of Agriculture & Natural Resources (MoANR), the company has already signed an investment agreement with the Ethiopian Investment Commission (EIC) on behalf of the Industrial Parks Development Corporation (IPDC).
Fitsum Arega, commissioner of EIC, and Yvan Schaepman, CEO of Boortmalt, signed the agreement on November 24, 2017, at the premises of the Commission.
The two parties signed the preliminary investment agreement some three years ago, but the actual deal got delayed due to aggregation- the formation of farmers, farmers’ union and private commercial farmers into a cluster, according to Mirafe Gebriel Marcos, senior director at the ATA.
Boortmalt Ethiopia has two projects comprising malting factory and the malting barley supply chain. It has also planned to create 300 job opportunities and plans to work with 40,000 to 60,000 farmers in its local sourcing project.
The Company divided the project into two phases, with a production capacity of processing 60,000tns of malt annually. In the second phase, it targets to export its products to East African countries, according to Oliver Ronin, country office coordinator of Boortmalt.
Being the first to join DBIP, the Company expects to finalise its first phase project between 12 months to 18 months. DBIP is designated to be an agro-processing industry destination and scheduled to be concluded with nine months.
“We expect the company to contribute its share in import substitution and would benefit the farmers through its local sourcing chain,” Fitsum told Fortune.
Currently, the national malt barley demand and supply has a gap as Assela, and Gondar Malt Factories are the only local malt processing plant for the demand of the seven operational breweries.
“The existing breweries are requesting for expansions, which will push the demand for malt,” said Fitsum.
With the growth in the number of breweries in the country, the demand for malt is also rising, reaching 236,000tns in the past year. Yet, the two malt companies, Assela and Gonder, produce only 52,200tns while imports made by breweries have passed 156,600tns.
“We aimed at increasing production and productivity through the market value chain,” said Mirafe.
The Company will have a long-term contribution as it will provide improved seeds to the farmers and assist them in storing the yield properly, according to Mirafe.
The coming of the new plant is a delighting news for Heineken, one of the giant breweries, which plans to source barley locally by 2020 completely.
“Meeting our target within the stated time frame will be challenging with the existing three malting factories,” said Fekadu Bashah, manager of External Communication & Sustainability at Heineken.
“We are making an effort to get another barley company to invest in the country which is expected to be finalized soon,” Fitsum told Fortune.