East African Breweries Limited (EABL) #ticker:EABL says it paid Sh1.2 billion to 62,000 sorghum farmers in the year ended June, a drop of Sh300 million compared to the previous year.
The listed brewer said it has brought on board an additional 17,000 farmers in the past year to supply sorghum to its new Kisumu plant.
“Besides the 45,000 small-holder sorghum farmers we have recruited in the last 15 years, our new KBL brewery in Kisumu has enabled us add another 17,000 in the last year alone. The Sh1.2 billion we paid to these sorghum farmers, most of them women, is an example of how we have leveraged our growth to build thriving communities,” said EABL in its 2019 annual report.
EABL chief executive Andrew Cowan said the brewer’s consumption of an estimated 60,000 metric tonnes of sorghum annually is expected to rise on the back of projected increase in sorghum beer production as the company moves to scale up the use of its new brewery in Kisumu County.
The firm said it had trained over 27,000 retailers on responsible drinking practices as part of its sustainability campaign.
In the western region, the brewer has contracted farmers in Migori, Homa Bay, Kisumu, Siaya and Busia to grow white sorghum, the main raw material for making its low-priced Senator Keg. Out of the total of Sh1.2 billion paid in the region, EABL says in the annual report, about Sh1.1 billion was paid by Kenya Breweries Limited, to Kenyan farmers.
The EABL, which started using sorghum as a raw material for the production of its low-priced Senator Keg in 2009, has been eyeing to increase local sourcing of raw material. The firm provides farmers with free inputs (seeds), fertilisers, extension services and other technical and financial support needed for farming, with a guarantee to purchase of the harvest of contracted farmers. This in turn helps the brewer cut costs.
The brewer contributed Sh64 billion to the Exchequer.
EABL’s local rival Keroche Breweries said last month it will pay sorghum farmers up to Sh200 million to supply 3.6 million kilogrammes of the beer ingredient over the next five months.