Tanzania Breweries Invests USD 40 Million in Kilimanjaro Malting Plant

Tanzania Breweries Limited (DSE: TBL) has announced a significant investment of TZS 96 billion in the construction of its Kilimanjaro Malting Plant in Moshi.

The plant is expected to bolster the agricultural sector by increasing local barley purchases from 5,000 tons to 32,000 tons over five years.

The plant will be the first to utilize the RimoMalt technology, a fully modular all-in-one standardised malting technology developed by Swiss equipment manufacturer Bühler. This technology will enable TBL to efficiently scale up its operations and meet the growing demand for its products.

The plant’s opening, scheduled for March 2024, is anticipated to stimulate Tanzania’s economy by benefiting brewers and manufacturers and is expected to inject an additional TZS 226 billion in tax revenues for Tanzania through an expanded value chain across agriculture, malting, brewing, packaging, distribution, logistics, and retail.

The project will be implemented in two phases. Phase one, between 2023 and 2024, will see an initial investment of USD 10.5 million for the production of 12,000 Metric Tonnes (MT).

This phase aims to enhance local production capacity through capacity building, seed variety testing, and the initial construction and upgrading of the malting facility.

Phase two, between 2024 and 2025, will scale up the project’s construction to 16,000 MT of capacity with a total investment of USD 6.3 million.

This phase will complete the project and prepare the plant for the utilization of the excise code on locally malted barley.

This announcement comes on the heels of TBL’s first-quarter results for 2023, which showed a 6% increase in revenue, driven by strong performance in the core and core plus segments of the business.

However, the operating profit declined by 10% due to increased distribution costs resulting from a rise in fuel prices and anticipated pressure on commodity prices.

The profit after tax for the quarter decreased by 7% compared to the previous year due to escalating costs.

Jose Moran, TBL’s Country Director, commented: “The total capital expenditure in the revamping of the Kilimanjaro Malting Plant is expected to be TZS 96 billion, with TZS 42 billion injected in the first phase. Overall, through this investment, the plant will broaden the contribution of manufacturing and local agriculture to the economy of Tanzania.”

Richmond Raymond, Brewery Operation Director, added: “This is a significant milestone for TBL and the Tanzanian community, as it marks a return to local production of malt, a key ingredient in brewing beer, and the creation of new jobs and opportunities for local farmers.”

TBL is a leading beverage company in Tanzania and a subsidiary of AB InBev, the world’s largest brewer. The company has a strong presence in the Tanzanian market, with a diverse portfolio of alcoholic and non-alcoholic beverages.

The brewing industry in Tanzania has been growing steadily, driven by a rising middle class and increasing disposable income.