EABL saves Sh134m ‘after replacing distribution partner’

Workers outside the brewer's plant in Ruaraka, Nairobi. FILE PHOTO | NMG
Workers outside the brewer's plant in Ruaraka, Nairobi. FILE PHOTO | NMG 

East African Breweries Limited (EABL) #ticker:EABL has disclosed that its move to replace DHL Supply Chain with Bollore Transport and Logistics Kenya as its distribution partner has resulted in savings of Sh134.4 million in the first year.

The regional brewer discloses this significant saving in its annual report, offering insight into why the firm was not keen on renewing the multibillion contract with DHL when it expired.

Bollore Transport and Logistics Kenya, a subsidiary of French multinational Bollore, was awarded the contract in June last year, bringing a close to the lucrative contract DHL had held since 2011.

“In the financial year (to June 2017) KBL Logistics carried out a successful transition to a new third-party logistics provider, Bollore,” EABL says in the annual report.

“The change will deliver an estimated cost savings of £1 million (Sh134.4 million) as well as increase logistics and warehousing efficiencies in the first year of operations alone.”

Bollore (formerly SDV Transami), which is also one of EABL’s long-standing hauliers, took over the extended role of warehousing at the 20,000 square metre facility that the brewer commissioned three years ago.

The firm now handles products when they leave the production line, oversees storage at the warehouse and loads them onto transporters’ trucks for delivery to distributors.

Other transporters include Metro Logistics that serves the brewer’s clients locally and in the region. DHL’s loss of the lucrative contract saw the firm declare dozens of its 300 staff redundant.

EABL, which is 50.02 per cent owned by UK-based brewer Diageo, is actively seeking to rein in costs and innovate its product offering in order to cushion its revenues from dampened beer sales.