The under-formation beer company, Habesha Brewery Share Company, sold 20 million birr worth of shares in the ten weeks they have been on offer.
The company is planning to collect seven million dollars from US-based members of the Diaspora.
The company, which has been advertising the offering heavily, planned to collect about 15 million birr in the first few weeks of the launch. However, it passed this target by more than a third again.
Eskinder Desta, the main promoter of the share company and managing director of Habesha Capital Services, told Capital that due to this performance the company should easily meet the deadline that ends in the first week of April this year.
Habesha is scheduled to collect 150 million birr in order to fund the production of beer for local and foreign markets.
Out of the collected 20 million birr, on average a single buyer bought shares worth 20,000 birr. According to observers, this level of initial investment is unprecedented in Ethiopia.
“This shows the public acceptance for share-based business, because other under formation companies are also currently offering their shares,” professionals suggested.
Currently, over 23 companies in the financial, agro-industrial, and transport industries are offering shares to the public.
Habesha is exploring water resources in the area where the brewery is to be located, which is 120km northeast of Addis Ababa, six km before the town of Debre Birhan in North Showa Zone of Amhara Regional State.
According to Eskinder, on February 20 a bid will float for the well drilling and on March 1, the bid document for terms of reference for brewery machinery suppliers will be released.
According to Habesha’s prospectus, the first factory at Debre Birhan will produce 300,000 hectolitres per annum from September 2011. The other factory that will be constructed at Menagesha, 20 kilometres south west of the capital, will have the same production capacity per annum. Each factory is to cost about 450 million birr.
Most of the founders and major promoters of the beer company were master brewers at the state-owned breweries or have experience of management in the beverage industry.
Ethiopia’s beer production in 2008/09 was about 2.9 million hectolitres; the annual consumption per head is 4 litres. According to data from the last three years, on average beer demand increases by 11 per cent per annum.
The ingredients for making beer are mostly available locally, according to sector experts. The only necessary imported items are factory components and their spare parts.
But the supply of malt, which is produced by the sole state-owned factory, Assela Malt Factory, cannot satisfy the demand of local breweries. The factory is under expansion, but meanwhile local breweries meet their demand by importing malt.
When the company launched the share offering 2.5 months ago, it offered 250,000 shares at a value of 1,000 birr. The minimum investment is four shares and the maximum is 122,500.
There are five breweries in Ethiopia; BGI Ethiopia, Dashen, Harar, Meta Abo and Bedele.
Another beer factory, which is called Raya Brewery, is under formation to be constructed in Tigray Regional State.