Lominat Beverages won the bid to buy Ethiopia’s National Alcohol and Liquor, the Ethiopian government announced. The operation, which attracted both domestic and international companies, sees Lominat expanding its business and move to both import substitution and manufacturing for export in the market for beverages in Ethiopia.
Lominat Beverages, an Ethiopian beverage, alcohol and spirits manufacturer, won the government-sponsored tender to buy the state-owned Ethiopia’s National Alcohol and Liquor Factory (NALF). The winning bid got the selling price to ብር3.62 billion ($130.5 million) – a significantly better deal for the government, which had set the initial asking price at ብር1.2 billion ($42.3 million).
The tender attracted the attention of both domestic and international players. Apart from Lominat, contenders included Pure Alcohol and Beverages Manufacturing, Matadim Manufacturing PLC or multinationals Diageo and Duet. Lominat’s offer was, by far, the highest and left little room for the government to seriously consider other bids. The second and third highest offers only stood at a few million dollars above the asking price.
NALF is the most profitable state-owned company in Ethiopia, recording increasing revenues and returns. In 2016, it profited over ብር607 million ($21 million) and it has, for the past years, invested close to one billion birr in expansion of its plants, currently located in Mekanisa, Sebeta, Akaki and Maichew. At present, the company has a production capacity of 30,000 litres.
The tender over NALF comes in the context of a policy of privatisation by the Ethiopian government. In late 2017, the National Tobacco Enterprise was sold to Japan Tobacco Inc. and Diageo acquired the Meta Abo Brewery in 2011.
Lominat expands local beverage market
The winning bid introduced by Lominat aims at strengthening the company’s role in Ethiopia’s beverage manufacturing market, namely at increasing the production capacity of the local market. Brook Worku, Lominat’s CEO stated that the main goal of the bid “is to develop the local market as per the international standard and completely substitute imports and even supply exports to the international market at an affordable price. […] We can produce the alcohol products and different brands that are imported from abroad and substitute exports by 90 percent, (…)”. Lominat is currently building an alcohol and beverages factory in Modjo, in a 45,000m² plot, 30 km south of Addis Ababa.
Lominat’s efforts come as other players, particularly multinational manufacturers, have invested in increased capabilities on the market for beverages in Ethiopia. Dutch giant Heineken has just opened a new production line, which has made it the biggest brewer in the country.
