Keroche eyes NSE listing

Keroche Breweries CEO Tabitha Karanja
Keroche Breweries CEO Tabitha Karanja. PHOTO/FILE
Keroche Breweries Ltd., a privately owned beer-maker, is planning to list on the Nairobi Securities Exchange (NSE) in next five years after increasing its production capacity by more than 10 times.

The company on March 31 opened a new plant at its Naivasha premises, with which it hopes to grow its market share to 20 percent from the current three percent.

Chief executive Tabitha Karanja said the plant will raise Keroche’s production to 110 million litres of beer a year from 10 million litres.

“The facility will guarantee that the promise to grow and be present everywhere in Kenya and beyond can now be effectively responded to; it will guarantee consistency,” said Ms Karanja.

Keroche received a Sh5 billion loan from Barclays Bank to help finance the expansion, which it expects to pay off by 2020 to pave the way for the listing of its shares at the NSE.

The firm is looking to grow its market share to 20 per cent from three per cent, Ms Karanja said, making inroads against the East Africa Breweries Ltd., which controls 95 per cent of the Kenyan beer market and half the spirits market.

The local beer and spirits industry is becoming more competitive with Keroche and others companies growing their presence, a move that threatens EABL’s revenue growth.

“With Keroche increasing its capacity by 10-fold we are going to see some jitters in the market as the brewer finds room for its increased capacity,” said Eric Musau, an analyst at Standard Investment Bank.

The brewer has the ability to double its share of the market within the next two years, he said.

Keroche produces a lager- and malt-beer brand called Summit, as well as a pre-mixed vodka drink, a range of distilled spirits including gin, brandy, whiskey and vodka. The company also distributes several types of South African wines.

The brewer plans to start supplying its products in shops in Tanzania and Uganda by the end of this year, taking its market share war with EABL to regional markets.

EABL operates manufacturing plants in Kenya, Tanzania and Uganda and it exports its products to South Sudan, Rwanda and the Democratic Republic of Congo.