Ethiopia: Soufflet gets EUR 20 million backing from World Bank

Groupe Soufflet, one of the largest malting groups in the world, has received a EUR 20 million backing from International Finance Corporation (IFC), a member of the World Bank Group, for their greenfield project in Ethiopia. The investment involves both IFC and the Global Agriculture and Food Security Program (GAFSP) to which IFC serves as the private sector window investing EUR 10 million each, to enlarge the production capacity of Soufflet Malt.

The French privately owned company announced last year to build a 60,000 t malting on the outskirts of Ethiopia’s capital Addis-Ababa. The project which is Soufflet’s first malthouse in Africa was said to cost about USD 50 million and was scheduled to start production in 2020 (, 13.6.2018).

In March 2019, Jean-Michel Soufflet, Chairman of the Soufflet Group Management Board, laid the foundation stone for the new malt house. In the longer term, Soufflet Malt Ethiopia hoped to reach a production capacity of 110,000 tons, the company said at that time.

With the financial injection, the nearly doubled capacity will now be reached much earlier. The money and the expanded malt production will help to support some 40,000 smallholder farmers in the value chain. “IFC’s investment in Soufflet Malt Ethiopia will boost local malt sourcing by helping smallholder farmers increase productivity, strengthening the country’s agricultural supply chain. Supporting agriculture is a major focus of IFC’s strategy in Ethiopia,” explained Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa,

Ethiopia produces two million tons of barley for human and animal consumption, more than any other country in Africa. The barley is grown on close to 1 million ha in the Ethiopian Highlands. However, despite being resilient to drought and extreme temperatures, conventional barley varieties are low yielding and are susceptible to pests and disease. Therefore the Holleta Agricultural Research Center of the Ethiopian Institute of Agricultural Research (EIAR) has been collaborating with four breweries and Assela Malt Factory, the largest malting company in Ethiopia, under a public-private partnership to improve Ethiopian malt barley seed varieties.

Soufflet said it will source its barely entirely from local farmers and 80 percent of the barley producers will be smallholder farmers. Currently, 70 percent of the countries malt and barley needs are imported, leaving the beer industry short of supply.

Ethiopia is also Africa’s 4th largest beer producer. Since the per capita consumption amounts to only 9 liters per head and year there is an enormous potential for growth.

The country had traditionally two local malt factories, Assela Malt Factory and Gondar Malt Factory, providing a total of 52,000 tons of malt for domestic breweries, which was about 30% of the total demand.

Assela Malt Factory, which had been under government possession for over 30 years, was sold in February 2018 for USD 48.8 million to Oromia Agricultural Cooperative Federation, a company founded by members of agricultural unions. One year later, in February 2019, the company said to triple its malt production from currently 36.000 tons to 100.000 tons per year (, 5.2.2019).

A new player in the market is French agro-cooperative Axéréal and its malting division Boortmalt, which became after the purchase of Cargill’s malt division at the end of last year the largest malting group in the world (, 20.12.2018). Boortmalt announced early in 2017 to build a new 60,000 t malting on a greenfield site around Debre Birhan city in Ethiopia. Production was planned to start by the end of 2018 (, 8.2.2017). However, building of the malt house was delayed and Boortmalt signed this September a contract to start construction in January 2020.

Although announced much later, it is much likely that Soufflet will now start earlier with its local malt production in Ethiopia than its French-Belgian rival and will have the advantage of an early mover.

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