French malt factory in Ethiopia begins production

Built in Debre Birhan Industry Park in Amhara region of Ethiopia and owned by the French Boortmalt, a subsidiary of Axereal (a French farmer cooperative), a new malt factor begins test production this week.

The new factory currently has the potential to produce 60,000 tons of malt annually. When it goes fully operational, the new factory is expected to reduce the volume of malt Ethiopia’s breweries have been importing from abroad. Through contract farming Boortmalt’s new factory is also expected to help malt barley farmers in nearby areas to consistently supply their produce moving gradually to clustered commercialized farming.

The information from Industrial Parks Development Center of Ethiopia shows that the new factory has began its operations last week in two of the factory’s eight slots found in Debre Birhan Industrial Park and plans to increase its production capacity gradually.

In a related development, last year another French company, Groupe Soufflet, has secured $20 million from International Finance Corporation (IFC) of the World Bank Group for its new malt factory to be opened in Ethiopia.

Including the new factory currently there are three operational malt factories in Ethiopia. The first one is Assela Malt factory owned by Oromia Farmers’ Union, which was privatized by the Government a few years ago. The other malt factory was set up a few years ago by Dashen Breweries, which is owned by a British company and the ruling party in Amhara Region.

A study on commercialization of malt barley conducted in 2018, malt demand is 50,000 ton while local sources cover only 50% of it. “Contracted famers gained a 10% high price advantage than the non-contracted counterparts. Given barley gene pool resources and favorable production agroecology, booming beer industries and growing malt demand imply malt barley production prospect is promising and attractive,” stated the study by Addisu Bezabeh AliAddisu Bezabeh Ali Department of Rural Development and Agricultural Extension, Haramaya University.

“Following beer companies privatization and enhanced working capacity, and malt demand increased by 83%. As result, malt barley contract farming scheme introduced by Heineken/chord to ensure local sourcing of malt barley by integrating large number of farmers to the value chain…Contracted farmers take a 10% higher price for malt barley than non-contracted food barley producer counterparts due to high yielding varieties productivity advantage from same parcel of land, similarly malt factories are integrated and benefiting from processing local raw material,” the study indicated.

Meanwhile latest reports suggest that national demand of malt is over 200 000T per year, as an estimation for this year. And the production without Soufflet and Boortmalt involved already cover 25% of it.