An up-and-coming brewery in Ethiopia with a popular product and fair portion of the market presented international investment firms with a recognisable growth opportunity in which to invest.
With the aim of contributing to lasting economic growth and improving the living conditions of the local population, DEG (Deutsche Investitions-undEntwicklungsgesellschaft mbH), one of EuropeÃ¢â‚¬â„¢s largest development finance institutions, identifies and invests in companies in developing countries. At the moment, it has its attention firmly focused on Dashen Brewery in Ethiopia.
The second largest brewing company in Ethiopia by capacity, Dashen Brewery is currently the only brewery in the countryÃ¢â‚¬â„¢s north-west region. It is located in Gondar, 700 kilometres north-west of Addis Ababa. Built in 1996, it is the youngest major Ethiopian brewery, but it offers very high quality products. Not many know that Dashen is the only Ethiopian brewery adhering to the German purity law which regulates the ingredients that can be used to produce beer.
Dashen Brewery has the potential to produce 769 000 hectolitres at any given time, employs over 600 people and has an 18 percent total market share by sales volume in Ethiopia. Its sales are particularly strong in the north of the country, where it controls 60 percent of the market. After over a decade of establishing a popular product and gaining a decent share of the growing 4.3 million hectolitre market, Dashen has teamed up with foreign investors, DEG, Duet Capital and Vasari Global who have provided the necessary backing to take the brewery to the next level.
Ethiopia had been on DEGÃ¢â‚¬â„¢s radar for a while especially as the investor watched the country and the changes that have occurred over the past four to five years. Christoph Evard, Vice President in DEGÃ¢â‚¬â„¢s equity/mezzanine team, explains that Ethiopia had, in the past, been highly regulated, making equity investments difficult to execute. DEG established a foothold in the country when it financed a hotel in Addis Ababa. Ã¢â‚¬Å“We got to know the country through this transaction and saw that there was a lot of potential from an entrepreneurial viewpoint,Ã¢â‚¬Â he says. Read more