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Standard Bank helps Coca-Cola Beverages expand in Ethiopia

Standard Bank helps Coca-Cola Beverages expand in Ethiopia

Standard Bank helps Coca-Cola Beverages expand in Ethiopia

Financial institution Standard Bank has successfully arranged and structured $50-million in financing facilities for Coca-Cola Beverages Africa (CCBA) to support its expansion strategy in Ethiopia over the next five years.

The Coca-Cola Company holds a majority stake in CCBA, which is the largest bottler of Coca-Cola beverages in Africa – serving 13 countries on the continent – and eighth-largest in the world by revenue.

The financing facility “demonstrates the importance of [Standard Bank’s] partnership with CCBA by offering unique solutions to key concerns, of which this transaction is a prime example,” Standard Bank’s relationship manager for CCBA, Simon Reeves, says.

Standard Bank corporate financing solutions head for the Africa region Stephen Lovell notes that the facility closely aligns with the bank’s key business imperative of driving sustainable growth across the continent.

With a presence in markets that match CCBA’s operations in Africa and having established a representative office in Addis Ababa in 2015, Standard Bank notes that it “was able to provide insight into the local market that best supported CCBA’s growth ambitions in Ethiopia – a high growth region for Coca-Cola”.

Ethiopia boasts the second-largest population on the African continent. While consumption of soft drinks is low compared with major markets, demand is expected to swell as the middle class grows.

The bottling company, East Africa Bottling, has already invested $70-million in a new plant that is set to become its largest in Ethiopia with a manufacturing capability of 70 000 cases a day.

Research by Fitch Solutions shows that the global soft drinks industry is worth $295-billion and is expected to grow to $377-billion by 2023. Africa only accounts for 3% of this total value, despite representing 16% of the global population, which is expected to rise 25% by 2050.

Lovell points out that Standard Bank has invested heavily in the consumer sector with a specialised team that is capable of supporting multinationals like Coca-Cola to capitalise on the consumer opportunity. 

“The CCBA deal holds significance as new foreign direct investment will be realised for Ethiopia, set to positively influence the country’s economic trajectory,” says Standard Bank Group Ethiopia head Taitu Wondwosen.

“CCBA’s expansion in the country complements government’s plans. The new bottling capacity that is earmarked for the country will continue to add jobs to those that have already been created by CCBA in Ethiopia and are a vital part of our overall investment ambitions in Ethiopia,” comments CCBA Ethiopia MD Daryl Wilson, adding that the expansion “is a first for CCBA and Standard Bank, who understood [CCBA’s] need and were able to find an innovative solution to solve it”.

The funding from Standard Bank is key to CCBA’s growth ambitions in Ethiopia.

Coca-Cola entered Ethiopia six decades ago and has since created about 2 100 direct and more than 50 000 indirect jobs in the country. 

EDITED BY: Chanel de Bruyn Creamer Media Senior Deputy Editor Online

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