Beer maker East African Breweries Limited (EABL)’s #ticker:EABL planned Sh15 billion factory in Kisumu will see up to 45,000 farmers contracted to supply sorghum which the firm uses to produce Senator keg, a low-cost beer.
EABL has contracted 30,000 farmers in Siaya, Migori, Kisumu, Homa Bay, Kitui, Makueni and Tharaka Nithi to meet the 20,000 metric tonnes annual demand of the cereal.
President Uhuru Kenyatta on Wednesday said the multi-billion shilling commitment by EABL is projected to grow demand for sorghum to 40,000 metric tonnes in the next five years.
“As a result, gross additional farmer earnings are expected to reach over Sh6 billion annually over the next decade,” he said during an address at State House.
Construction of the new brewery is set for launch on July 16 with operations expected to start within 18 to 24 months.
It will sit on land previously occupied by a Kisumu brewery which commenced operations in 1984, but was shut down in 2002.
The parcel of land leased to the Kenya Breweries Limited (KBL) has remained idle and has been at the centre of a tussle with the county government.
The county says it should be repossessed and allocated to new investors. Re-opening of the facility is set to lead to fresh demand for Senator, a beer launched in 2004 and targeted at the low-end of the market.
Diageo Global chief executive Ivan Menezes, who was present during the announcement, said the investment underlines the company’s long-standing commitment to Kenya.
“This announcement now brings our incremental capital investment to Sh30 billion over the past five years and further deepens our relationship with Kenya, which has now spanned 95 years,” he said.
The factory will potentially create 110,000 jobs, which include direct employment for suppliers and plant workers as well as their families.
In January, the EABL signalled intentions to continue with the sale of prime assets with an invitation of bids for a disused brewery and a prime piece of land in Mombasa.
The property, which sits on a six-acre piece of land in Mombasa’s Shimanzi Industrial Area, was put on sale for a price of Sh700 million.
The sale of the property was part of plans to exit a leasehold agreement the brewer has had with the Kenya Railways Corporation (KRC) for more than 60 years.
The beer maker last July sold its Ruaraka-based headquarters to Tembo Sacco, a 2,400-member savings and credit co-operative society made up of current and former staff, for Sh675m.
The building has since been leased back to EABL, which continues to use it as its headquarters.