Companies

Kwal eyes local production of Savannah and wines in Sh4bn investment

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Kenya Wine Agencies Limited (Kwal) Managing Director Lina Githuka during the groundbreaking ceremony for its factory at Tatu City in Kiambu County on February 12, 2021. PHOTO | FRANCIS NDERITU | NMG

Savannah Dry, 4th Street and Drostdy-Hof wines will soon be manufactured in Kenya as part of a plan by Kenya Wine Agencies Limited (Kwal) to increase local production in its new Sh4 billion investment in Kiambu.

Kwal has said it will be the first round in localisations of wine brands under its portfolio where most of the beverages are imported from South Africa.

The strategy is set to help the firm expand in the alcoholic beverages industry, increase competitiveness through pricing and raise its export business estimated at 10 percent of its revenues.

This follows an Sh4 billion investment at Tatu City Industrial Park that includes Sh1.159 billion land.

“The key object of Tatu City is to support our growth agenda which is anchored on localising manufacture of the imported portfolio. We want to manufacture in Kenya and play at a regional level,” said KWAL managing director Lina Githuka.

Kwal is owned by South Africa’s beverage firm Distell Group which controls the majority stake 55 percent, with the Kenyan government owning 42.65 percent through the Industrial and Commercial Development Corporation (ICDC).

Its categories of products are wines, spirits and ready-to-drink juices.

The Sh4 billion investment will also help Kwal increase production of drinks it already manufactures in Kenya like Kibao Vodka, Hunter’s Choice, Viceroy Brandy and Country Brandy.

Brands such as Caprice Wine and Cellar Cask bought in bulk, blended and packaged in Kenya.

“The plan will require souring raw materials,  bottles and labels, and ratification from brands' brewers in order to produce to global standards,” she added.

The processing and packaging will be carried out at Tatu City factory currently ongoing construction and expected to be complete by August.

Kwal invested Sh4 billion in phase one of the project which will include an office block, the factory and a warehouse to support the expansion, additional lines and packaging facility.

The investment comes amid an expected acquisition of the majority share in Distell by Dutch brewer Heineken.

Distell’s cider, ready-to-drink beverages, and spirits and wine business will be combined with Heineken’s interests in Southern Africa, including Namibia and select export markets in East Africa held by Newco, a wholly owned subsidiary of Heineken, to form unlisted entity.