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Keroche Breweries eyes market share surge to 20 percent

04 March 2015, 09:27

Naivasha - Keroche Breweries is investing 5 billion shillings ($55 million) to increase its capacity tenfold and help it grow its share of the alcohol market six-fold to 20 percent in about a year, its chief executive said.

Tabitha Karanja told the Reuters Africa Investment Summit the money was being used to build a new 1 million hectolitres-a-year brew house and bottling line to be launched this month that would help the company raise its market share from 3 percent.

"With the right team in the market it will take us only one year," Karanja said at the brewery in Naivasha, an hour's drive north-west of the capital Nairobi.

Owned by the Karanja family, Keroche started by making spirits and wines in 1997 before diversifying into beer in 2008.

Its Summit Lager and Summit Malt beers compete with products by Diageo's East African Breweries, which enjoys a commanding lead with popular brands that include Tusker.

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"It only took us one or two years and we started experiencing capacity problems. It has been a challenge trying to build up and fill that gap," Karanja said.

The expansion is 80 percent funded through a loan from Barclays while the rest was generated internally.

Karanja said the increased production will also allow Keroche to start distributing its other products, which include spirits and table wines, in Uganda and Tanzania.

Keroche will raise further capital for investment in about five years when it offers its shares on the Nairobi Securities Exchange, the chief executive said.

Keroche will consider putting up a malting plant in the future if no other investor will step forward to build one, at a minimum cost of 1 billion shillings, Karanja said, adding that Kenyan brewers rely on imported malt.

"We have that challenge now we as Africans, to be part of investing in our own continent. Africa is rising," she said.

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- Reuters

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