The construction of the Sh15 billion Kenya Brewery Ltd Kisumu plant will take 18 months after President Uhuru Kenyatta presided over its ground breaking on Wednesday.
The ceremony kicked off the installation of a new brewery and refurbishment of the facility set to produce KBL's low-end beer – the Senator keg.
Once complete, it will employ 1,500 people directly and up to 25, 000 sorghum and cassava farmers in the western Kenya region.
Senator keg, its flagship beer will account for 25 per cent of its production, pushing the total production to nearly 1 million hectolitres (100 million litres) per year.
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The KBL managing director Jane Karuku clarified that it was the old plant that would be refurbished, expanded and equipped, not an entirely new plant constructed.
"When KBL left Kisumu the equipment were also stripped off, these are the things we are bringing back, but on a larger scale. This will require some little expansion of the existing facility and replacement of weak areas," she told the Standard Online Business.
The factory which ground to a halt in 2002 as sophisticated technology at the Nairobi factory boosted production, is expected to bring back economic vibrancy to the lakeside town and the region with direct and indirect jobs on the cards along the supply chain.
Ms Karuki said a number of jobs would also be available to the locals over the period during which the factory will be set up.
"It is great news for Kenya's economy and particularly the people of Kisumu who have been asking when we will return after halting production in 2002. This investment constitutes 25 percent of the total annual capital expenditure for Diageo, our parent company - a resounding statement of confidence with government.
It follows our capital expenditure investments totaling Sh16 billion in the last 5 years alone, taking our total investment to over 30 billion, spent on expanding our local raw material sourcing, production, distribution and retail capacity across Kenya," she said.
She said KBL's strategy focuses on the 'From Grain to Glass' value chain which is now projected to double the market for sorghum as a cash crop, from the current 20,000 metric tonnes to around 40,000 in the next five years.
The brewery is therefore expected to lift the demand for sorghum, which will in turn support small-scale farmers in the region. The additional earnings for farmers is expected to rise from Sh2.2 billion per year currently to Sh6 billion in 10 years.
A rise in the production of keg is expected to reduce consumption of illicit alcohol from the current 50 per cent to less than 20 per cent over the same period.
Karuku said EABL, which through its subsidiary East African Maltings Limited, currently has 33,000 contracted farmers, plans to grow the farmer base to 45, 000 in the next five years due to high demand.
She said farmers in the western Kenya region who have hitherto been ferrying their crop to the Nairobi plant would save costs once the ambitious project is operationalized. The climate in Nyanza is one of the most conducive for sorghum and millet production and the location of the plant will immensely benefit the local farmers
"The farmers here will be greatly advantaged because Kisumu is central to this region and they won't have to incur a lot on transport," she said.
She added that the Kenya Agricultural and Livestock Research Organization had already unveiled new sorghum varieties to be introduced to local farmers to boost returns from the project.
President Kenyatta who broke the ground for the facelift hailed the investment, adding it would provide job opportunities as well increase earnings for farmers.