The attempt by the brewery to solve the problems by
using diesel generators does not appear to be
St. George beer and draught have been greatly
affected by the power shortage but the problem is
not limited to BGI's products, Terefe told
Dashen Beer, began experiencing a shortage in the
middle of June. The second most requested beer at
Panorama Food Court (PFC), a modern eatery in the
Bole area of downtown Addis Abeba on the fourth
floor of DHGEDA Tower on Africa Avenue, is now hard
to find. The café is also having a difficult time
keeping St. George in stock. In the months just
before May, the restaurant used to receive 25 crates
of BGI's leading brand twice a week. Now they get 15
to 18 crates, Kirubel Melaku finance manager at the
eatery, told Fortune.
Both breweries are affected by the power problem in
BGI has faced the decline in all of its brands after
its standby generator at the Addis Abeba plant went
out of service.
"The shortage is on all brands," Esayas Hadera,
marketing manager, said in a written reply.
Since the problem started shaking the market in
early June, BGI devised a rescue measure of
operating for 24 hours everyday of the week at both
of its production plants - in Addis Abeba and
The two factories had a joint capacity of producing
135,000 hecto-litres (hl), 50pct of which is draught
beer, monthly before the power shortage occurred.
The Addis plant, which is under repair right now,
produces 90,000hl of the total amount. BGI incurred
a 20,000hl scarcity of its product following the
Despite the dearth, BGI claimed it has an estimated
54pc of the current market share and it did not make
changes on the price of the products. In fact, its
competitors and industry observers agree that BGI
has a market share of a little over half
"BGI products are available in all parts of the
country since the two production units at Addis
Abeba and Kombolcha work non-stop," Esayas
The Kombolcha plant supplies the north, northwest,
northeast and central markets of the company while
the Addis plant supplies the rest of the country.
In an attempt to offset the shortfall with a
temporary solution, the factory in Addis has
installed three medium sized generators. However, a
few weeks ago it imported a high capacity generator
(2,250kva) that arrived on June 26, 2009 and is
expected to be up and running after three weeks of
installation. The new "Caterpillar" generator which
weighs 17tns was purchases from France for 579,000
dollars, according to Esayas. The previous standby
generator, which is now out of order, had a capacity
of 2,000kva. This has forced BGI to rent a 600kva
generator, Esayas added.
Almost all factories are using generators.
Harar Brewery, more than 520Km east of Addis Abeba,
produces beer with a dominant market share in
eastern Ethiopia. It has been operating with two
generators, one with 1250kva and another with
600kva. The company's management claims that the two
generators have helped them remain significantly
insulated from the blow by the power shortage.
"Except for a minor deficiency in manpower and some
technical problems, the company has not
significantly reduced production due to the power
blackout," Juneydi Basha, general manager of the
factory, told Fortune.
That doesn't mean the company has not been hit by
the power crisis. They began facing a shortage in
This brewery's major markets are in the east and the
southern parts of the country.
For example, Tana Hotel Harar, located 526km east of
Addis, used to get up to 50 crates twice a week. Now
they get 40 crates, Hailu Kasa, owner and manager of
the Hotel, told Fortune.
Another major market actor, Meta Brewery, located
24Km to the southwest of Addis Abeba, is known for
Meta Beer and Meta Premium brands.
It has faced a huge production shortfall due to
power shedding. This brewery, with 22pc market share
nation-wide, previously operated with over 90pc of
its installed capacity before May 2009 producing
400,000hl annually. The power blackout, however, has
dropped the production to only 60pc installed
capacity, an employee of the factory told Fortune.
To alleviate the shortfall of its production the
factory runs its machines every night from 12:00am
to 6:00am, according to the same employee.
The new scheme, however, applies to only workers in
the production lines The factory does not keep
employees in other positions like packaging since
workers leave at 5:30pm, the employee who requested
to remain anonymous told Fortune.
The Meta Abo Brewery products are mostly consumed
around central, western, eastern and southern parts
of the country.
The other brewer that dominates the western part of
the country is Bedele. Its products cover 12pc of
the national market share.
In the pre-blackout time, it produced 350,000
bottles Now using one standby generator and a
12:00am to 6:00am schedule of production, the
factory produces between 150,000 and 250,000 bottles
depending on the amount of power it uses.
Its regional market share, heavily concentrated in
the western part of the country, stands at 85pc.
While all these breweries share the same problem,
the youngest of the factories, Dashen Brewery, faces
not only of the national power shortage but also a
scarcity of cork supplies. Previously, the factory
used to take corks from Metal Crown Ethiopia Plc;
whereas now the cork producer itself is facing power
shortages since early June 2009. This led to the
cork producer's failure to supply those which depend
on its products for their production.
The Metal Crown, located 37Km east of Addis Abeba in
Dukem, East Shoa Zone of Oromia Regional State,
produces cork for Bedele and Harar breweries as well
as the two soft drink producers (East Africa
Bottling and Moha). "Dashen is one of our main
customers and we are trying to satisfy the need of
the factory at any cost. The Dashen Beer factory
will get the corks from our head station in Kenya in
a short period of time," officials of the cork
company disclosed to Fortune.
However, the company has been forced to import corks
from the Spanish company, Jose Combalia Plc and from
the Kenyan branch of Metal Crown, according to the
"From June 14, 2009 onward our factory has totally
stopped taking corks from Metal Crown Ethiopia Plc,"
Birhanu Admasu, general manager of Dashen told
Like the other breweries, Dashen operates with the
electricity it gets from 12:00am until 6:00am.
The brewers are, of course, not the only sufferers
from this calamity as most factories have been
forced to halt production and send their employees
home. Businesses are slowing down and the national
economy's GDP is declining, as recently admitted by
Prime Minster Meles Zenawi.
Yet, whatever these breweries do to keep themselves
in the market is a temporary solution. The highly
anticipated heavy rains, have only recently begun.
The unprecedented power shortage has much to do with
the volume of water the dams received from the
Belg rains this year which have been
significantly lower than what EEPCo had expected. In
fact officials at EEPCo say the Belg rains
have been almost nonexistent.
EEPCo introduced the every other day blackout in mid
May when electrical engineers and officials at the
state utility, as well as energy authorities in the
government realized that the original power shedding
plan would not enable them to maintain the sparse
supply to consumers until the rainy season enhanced
the water supply of hydroelectric dams.
The 67Mw to 130Mw power deficit during peak hours
caused officials of the EEPCo to cut power through a
shift system. However, the frequency of
no-power-days in a week has now increased to every
other day for approximately 18 hours. The current
situation is a far cry from the original plan of
load shedding for six days a month and 14 hours a
day, for three months, as was publicly announced on
April 3, 2009.
To avoid the intensive blackout, EEPCo had planned
to rent diesel generators with a capacity of 120Mw
for about six months from December 2008, using
finances from the Ethiopian government and the World
Bank. It, however, has only managed to install half
the number of generators as the financing from the
latter source has been significantly delayed due to
bureaucratic issues, Miheret Debebe, CEO of the
power utility told Fortune last May.
The generators obtained, with a combined 60Mw
capacity, have been installed in Adama (Nazaret) and
Bishoftu (Debre Zeit) towns, 99Km and 47Km east of
Addis Abeba, respectively. They were brought into
the country at a cost of more than 500 million Br
for the rental fee and for the diesel consumption.
This, according to the CEO, includes the
approximately 0.15 dollars per kilowatt per hour
subsidy the government pays for the power obtained
from the rented generators. The subsidy is the
difference between the local cost of power as sold
by EEPCo and the charge by the owners of the
The critical power shortage problem will be reversed
under two conditions. These being the availability
of abundant rain in the current season or the
commissioning of the Tekeze Hydro Power Generation
plant, whose construction was finalized nearly a
year ago and the now completed Gilgel Gibe II.
As much as the power company is eager to see the
rain pouring down for hours, as it does in normal
Keremts (rainy seasons), the brewers and the
thousands of businesses affected by the blackouts
wait for the increase in the volume of water in the
dams to rescue them from suffering any further.
Recently, heavy rains have begun to alleviate the
problem. There have been daily increases of the
average of one to two centimetres in the water
volume, according to Girma Zeleke, EEPCo's National
Grid Control Centre Process officer. However, the
increase in volume has not been enough to convince
EEPCo's officials and experts to reduce the number
of days with out power.