Zambia: Zambian Breweries’ new malting plant commissioned by President Edgar Lungu

Zambia’s President Edgar Lungu has officially commissioned the Zambian Breweries’ US$33 million state-of-the-art malting plant in the Lusaka South Multi Facility Economic Zone (LS-MFEZ), the Lusaka Times reported on April 1.

“This new facility, which is the first of its kind in Zambia, will enable locally grown barley to be processed into malt, the main ingredient for clear beer. It will contribute to creating business for farmer suppliers who will provide the brewery with barley, thus spurring economic growth and job creation, ultimately putting more money in people’s pockets,” said President Lungu during his address to assembled dignitaries, including Finance Minister Hon. Felix Mutati and Minister of Commerce, Trade and Industry Hon. Margaret Mwanakatwe.

The new plant is part of Zambian Breweries’ long-term investment plan in Zambia and is set to boost purchases of barley from local farmers as a key ingredient in the company’s popular Mosi, Castle and Castle Lite lagers.

The company’s multi-million dollar investment in the maltings plant is a component of the group’s wider commitment to long-term investment, spurred by the government’s recent reduction in excise tax on clear beer. In the last five years Zambian Breweries, National Breweries and Heinrich’s Syndicate have invested more than US$350 million in long-term capital projects.

In alluding to the reduction in excise tax on clear beer, President Lungu said: “I am reliably informed that Zambian Breweries plc made a decision to expand its business portfolio as a direct response to the Patriotic Front government’s 2016 National Budget that included a reduction in the excise tax on clear beer from 60 to 40 percent. This resulted in the Zambian Breweries plc making a saving and investing US$33 million in the malting plant which is being commissioned today.”

Zambian Breweries Country Director Annabelle Degroot said: “At the time that clear beer excise was reduced to 40 percent, some people were worried about such a move, but that bold policy by government has proved to be absolutely the right decision and a win-win for government and business. We commend and thank government for their forward looking policies.”

“Zambian Breweries is committed to following the law; to paying taxes; and to promoting responsible drinking. Zambian Breweries is also committed to continued investment in Zambia,” she added.

The group’s investments are helping it to grow production volumes, thus increasing employment opportunities, enabling the company to buy more agricultural commodities such as barley, maize, sorghum and cassava from local suppliers and boost sales, thus increasing overall tax revenue to the government.

The new facility – the first of its kind in Zambia – will enable locally grown barley to be processed into malt, the main ingredient for clear beer, for the first time in Zambia, creating more business for farmer suppliers who provide the brewery with barley thus spurring economic growth, job creation and national development, explained Mrs Degroot.

“This malting plant is a concrete demonstration of the confidence that Zambian Breweries and its shareholders have in the long-term growth of the economy and the stability of the tax environment,” she added.

Construction of the plant began in January 2015 and employed 1,000 workers at peak of the construction. Now that the project is complete, Zambian Breweries expects to recruit some 50 permanent workers.

The plant has a maximum capacity of 15,000 tonnes of finished malt per year, creating a surplus over the brewery’s current demand of 10,000 tonnes and thus producing excess supply that can be exported.

The barley will be stored in ten massive 1,500 tonne-silos, each 32 metres high, which involved the country’s largest single pour of concrete – 1,800 cubic metres – for their foundations.

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