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Dutch Brewer's Ethiopian Unit to Start Sales in Q2

FILE - Advertisements for beer brewers Heineken (far l) Brand, owned by Heineken, Bavaria, (c) and Grolsch (far r), are seen in the center of Amsterdam, Netherlands, Oct. 1, 2007.

Ethiopian greenfield brewer Habesha, majority-owned by Dutch brewer Bavaria NV, said it plans to start selling beer in the second quarter of this year to tap rising domestic demand that has attracted global brands.

Bavaria NV is the latest beer maker lured by Ethiopia's expanding middle class over the last five years and will compete with breweries owned by Heineken and Diageo.

The world's leading brewers have turned their focus on emerging markets such as Africa as consumer demand in Europe has stagnated and the United States offers limited expansion opportunities.

“We expect to start selling beer in the second quarter of 2015. Say two or three months from now,” Thijs Kleijwegt, Habesha Breweries' finance director, told the Reuters Africa Investment Summit.

Ethiopia's average annual beer consumption of less than five liters per capita is about half the average for sub-Saharan Africa, excluding South Africa, offering scope for expansion among the population of 94 million, more than 60 percent of whom are Christian.

Bavaria NV bought a stake in Habesha Breweries in 2012, and has since increased its holding to 60 percent.

Habesha's plant in Debre Birhan, around 120 kilometers (72 miles) north of Addis Ababa, will have a capacity to produce 350,000 hectolitres once it is completed, although production will start before then.

Heineken's $130 million brewery near Addis Ababa is the largest in Ethiopia with a capacity of 1.5 million hectolitres.

The Dutch firm also owns the Bedele and Harar breweries it purchased from the state for a combined $163 million in 2011.

Diageo acquired Meta Abo Brewing in 2012 for $225 million, while Ethiopia's BGI - considered the market leader in the country - was bought by French drinks company Castel in 1990.

“It is an interesting beer market,” Habesha Breweries' Kleijwegt told Reuters. “I think the potential in Ethiopia is huge.”