Nairobi Bottlers plans Sh4.3bn expansion drive to meet demand
Bottles of Coca-Cola on the shelves of a store in Beijing. Nairobi Bottlers unveiled a new plastic bottling line in Nairobi. Photo/AFP
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The company said it is reacting to the growing demand for plastic bottles compared to glass which currently controls 70 per cent of the packaging.
Nairobi Bottlers Ltd plans to spend Sh4.3 billion in the expansion of production lines as it seeks to maintain its grip on the increasingly competitive beverage market.
The company on Wednesday unveiled a new plastic bottling line at a cost of Sh1.2 billion in Nairobi’s Embakasi and plans to set up another in Uganda with a capacity of 20,000 bottles per hour.
Also in the pipeline is a new line in Kisumu and expansion of its warehouse in Nakuru.
The company said it is reacting to the growing demand for plastic bottles compared to glass which currently controls 70 per cent of the packaging.
Users of plastic bottles include soft drinks manufacturers that have increased production by 10 million litres to 371 million litres last year, according to the Kenya National Bureau of Statistics.
The new plastic bottling line, 60 per cent financed by Citi Bank and 40 per cent by Nairobi Bottlers, is expected to double the firm’s bottling capacity.
“The investment is part of the larger Sh4.3 capital investment this financial year. The amount will double in the next three years to keep pace with the expanding market,” Patrick Pech country manager, Coca-Cola Sabco.
Key rival, Pepsi Cola, is also expected to commission a Sh2.4 billion plant in Nairobi later in the year.
Increase capacity
SABMiller is also flexing its muscles in the East African region with an expected re-launch of a local water brand. SABMiller is the larger producer of soft drinks.
The new bottling plant has seen Nairobi Bottlers increase its capacity from 24,000 bottles per hour to 52,000 bottles.
It will also help it to stop importing its Dasani water brand from Tanzania to supplement local demand.
The plastics production line capacity at Nairobi Bottlers—which supplies the entire country—had been stretched to capacity, failing to meet growing demand.
Nairobi Bottlers is the only producer of PET bottles in Kenya which it distributes to the other six bottling franchises under Coca-Cola brand.
Data from the United Nations Industrial Development Organisations (Unido) shows that East Africa has the fastest-growing beverage market on the continent, making it the investment destination for beverage manufacturers.
The growing beverage sector has created demand for fruit farming giving employment to local farmers.
Coca-Cola in partnership with the Bill and Melinda Gates Foundation are currently working with farmers in Kenya to boost fruit farming in a Sh924 million project.
The company is also in talks with the City Council of Nairobi to have a direct water supply.
