Kenya: Kenya Breweries to recruit fifteen thousand new sorghum farmers to support new Kisumu plant

Kenya Breweries plans to recruit fifteen thousand new sorghum farmers to support the expected growth in demand for the produce at the new Kisumu plant currently under construction, the Kenya Broadcasting Corporation reported on January 26.

Kenya Breweries Managing Director Jane Karuku says this will be done under the Mtama ni Mali Project which targets farmers in arid and semi-arid areas.

This emerged as East Africa Breweries announced an 11 percent reduction in half year net profit to 4.95 billion shillings with the brewer recommending an interim dividend of two shillings per share.

Kenya Breweries is currently working with 34,000 local sorghum farmers and 900 barley farmers contributing 80% of raw materials.

The brewer is seeking to source all its sorghum and barley from Kenya by the year 2020.

On average, the brewer pays out Ksh 1.7B annually to contracted barley farmers and an additional KES 660M to sorghum farmers.

With the brewer currently constructing a KES 15b plant in Kisumu, the firm is seeking new partnerships with farmers in arid and semi-arid areas.

It plans to entice farmers to sign supply contracts by offering them extension services and farm inputs.

KBL is East African Breweries Limited’s largest profit contributor at 75%. This is expected to steadily increase with the senator keg plant in Kisumu which in the half year ending December 2017 has cost KES 2B.

Net sales were down 0.35% to KE 36.8B on account of an increase in excise tax in Uganda and higher inflation and prolonged electioneering period in Kenya.

New investments have also pushed capital expenses to KES 5B from KES 1.8B a year earlier.

EABL’s net profit reduced 11% to KES 4.95b due to costlier credit and an increase in brand investment and sales.

EABL has recommended an interim dividend payout of KES 2 per share, same as last year.

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