On Friday, 24 November 2017, Boortmalt, the world’s fifth largest malt producer, signed a lease with the Ethiopian Investment Commission (EIC) – acting on behalf of the Industrial Parks Development Corporation – for land on which to develop a malting plant in the Debre Birhan industrial zone. The agreement formalizes negotiations for the malting investment that have been ongoing since 2016 when Boortmalt, EIC, and the Ethiopian Agricultural Transformation Agency (ATA) signed a memorandum of understanding to explore opportunities to expand Ethiopia’s local malting capacity.
The investment, the first anchor investment for the Debre Birhan Industrial Park, is a major milestone for efforts to attract agri-business investments in Ethiopia. The investment is part of an effort to build demand for malt barley produced locally by Ethiopian farmers and increase the supply of locally available malt for Ethiopia’s growing beer industry. The lease grants Boortmalt 15 hectares of land on which to build a 60 metric ton world-class malting plant. The company also plans to build a state of the art green and sustainable grain store.
The agreement, signed at EIC between Ato Fitsum Arega, Commissioner of EIC, and Mr. Yvan Schaepman, CEO of Boortmalt, is a result of the collaborative effort between the ATA, EIC, the Ministry of Agriculture and Natural Resources (MoANR), and concerned regional and federal organs of the government, to arrange and facilitate the granting of land permits for nucleus farms, malting plants, and satellite silos. This marks the first major international investment conversion to result from these efforts.
ATA and EIC developed the greenfield business case for a malting plant from its inception and cultivated it through to this first conversion. The initiative aims to develop a dedicated local malting barley supply and value chain in Ethiopia working with farmers, primary cooperatives, and unions in Ethiopia’s key malt barley growing areas. The business case identifies the profit potential and reciprocal benefits of linking smallholder malt barley farmers with large scale contract buyers. In recent years, Ethiopia has only been able to meet 50% of malt demanded locally, supplying the rest through imports.
Investments of this type have the potential to link 20,000 to 40,000 farmers with large scale contract buyers. The commercialization of smallholder farmers remains a critical component of Ethiopia’s aim to transform the agriculture sector, drive development, and achieve middle income country status by 2025.