Business News of 2013-12-25

ABL invests US$100m to double capacity

The Accra Brewery Ltd (ABL) has received the approval from city authorities to build a multimillion-dollar new packing lines and office complex to expand its operations.

Officials of the ABL told the GRAPHIC BUSINESS that the expansion works, which would double its current capacity, was necessary if the company was to meet the growing demand for its range of 14 products in a couple of years.

The two-phased project comprises the construction of two ultra-modern packing lines, each for beer and soft drinks. This will enable the brewing giant increase its capacity from 700,000 hectolitres of alcoholic beverages a year to 1.2 million hectoliters, while soft drinks production would double from the current 250,000.

The second phase would include facilities for offices for administration staff. The first phase would be ready in October 2013.

Project features

Projects Manager at the ABL, Mr Amos Aihoon, told journalists who were predominantly members of the Institute of Financial and Economic Journalists (IFEJ) that the packing lines would come with associated utilities, including steam facilities, compressors and generators.

There would also be a new loading gantry and exit into the eastern side of the eight-acre plot for the project which measured about twice the size of a standard stadium.

“The position of the new exit gate is in response to a traffic impact assessment the company carried out,” Mr Aihoon said.

The project would also own an effluent treatment plant to ensure efficient liquid waste management.

Officials further said the brewer would also make provision for a bigger water storage reservoir to forestall the water shortage menace in the capital. The plant occasionally shuts down production for lack of water, an important ingredient in the brewery industry.

Project everest

The economic benefits of the project are enormous, according to the Corporate Affairs and Legal Manager, Ms Adjoba Kyiamah.

The higher capacity means more revenues for the company, as well as its distributors and transporters. The net effect would be higher taxes for the government. The brewery industry is one of the highly taxed across the world as it bears the brunt of progressive taxes.

Ms Kyiamah said raw materials sourced locally would also increase and translate into more revenues for farmers and agribusinesses.

Maize, sorghum and, lately, cassava are among the locally sourced raw materials the company uses in its production. Farmers of these crops have a lot to cheer about.

Ultimately, the corporate affairs manager explained that customers would also be satisfied as those occasional shortages of some of its products would be a thing of the past.

The entire project would be financed by the ABL’s parent company, SAB Miller of South Africa.

Economic benefits

The ABL rolls out medium-term strategic plans every three years. The plan outlines its development strategy and how it would meet consumer demands.

The company, thus, realised about four years ago that it had to increase its capacity to meet growing consumer demands, and there, it set out to execute the project with two plans in hand.

First was to look for a site for a new plant. However, any site they found was encumbered after a year of search. The ‘Plan B’ was to do the expansion.

Having delayed the project for a whole year, the management of the ABL are racing with time to catch up with deadlines for deliverables; hence, the code name “Project Everest.”