BGI Ethiopia faces challenges amidst war and plans strategic changes
Herve Milhad, the CEO of BGI Ethiopia, a prominent alcohol company in the country, recently addressed several key issues affecting the organization.
Among these topics were the company’s new plans, the relocation of the factories to Sebeta and Maichew, the sale of the head office compound to Purpose Black Ethiopia, profit-related matters, and more.
In his statement, Herve Milhad announced that BGI would merge the previously independent joint stock companies into a unified entity.
Additionally, the company aims to undertake product improvement initiatives, doubling its beer production from the current 5 million hectoliters to 10 million hectoliters over the next five years.
Key activities in the pipeline include enhancing brewery productivity, expanding the customer and distributor base, shifting the company’s factories from Addis Ababa to Sabata and Maichew , avoiding work and responsibility duplication, and expanding Raya and Zebidar Breweries.
The CEO disclosed that BGI’s Addis Ababa head office had been sold to Purpose Black, with the transition expected to be completed within the next 18 months.
He clarified that the decision to sell was not influenced by government pressure, stating that it was driven by a favorable offer from Purpose Black Ethiopia.
Milhad added that the government might suggest moving offices from the city center to the outskirts in the future, but it did not play a role in the current decision.
Regarding the market position, Milhad acknowledged a decrease in BGI Ethiopia’s market share, now ranking third in the country.
He revealed plans to merge Diageo’s breweries with BGI while assuring that products would continue under their respective brands.
Responding to inquiries about employee reductions, the CEO emphasized the company’s commitment to providing appropriate payments for those reaching retirement age, eliminating overlapping and unproductive positions.
Addressing the impact of war and security issues in Ethiopia, Milhad highlighted challenges in product movement and sales due to ongoing unrest, especially in Tigray.
Distributors faced difficulties, compounded by currency shortages and resource constraints. Despite these challenges, BGI Ethiopia remains profitable, and Milhad expressed optimism about introducing new products in the coming years.
In the midst of these challenges, BGI Ethiopia is undergoing organizational restructuring with a goal to become the ’employer of choice.
Currently, the company employs 3,500 permanent and 2,000 casual employees across its seven plants, making it the leading platinum taxpayer in the industry, contributing over 7.4 billion Birr annually in taxes.
