A $60 Million Capital Injection Provided Significant Support To A Tanzanian Glass Bottle Company
Posted on : Tuesday, 4th June 2024
In Dar Es Salaam. The International Finance Corporation (IFC) and Standard Bank of South Africa have contributed $60 million (about Sh156 billion) to Kioo Limited, a Tanzanian glass bottle producer, giving it much-needed support.
In a statement released, Kioo Limited stated that the funding is intended to help it expand its manufacturing capabilities in order to satisfy the rising demand for glass bottles and containers in the local and regional markets.
As part of the collaboration agreement, Standard Bank will contribute up to $15 million and IFC up to $45 million to support Kioo's expansion of its manufacturing capacity and export potential.
In addition to boosting Kioo's usage of recycled glass in its manufacturing process, the initiative is anticipated to generate thousands of employment and boost Tanzania's economy. This will help the company consume less energy.
According to the statement, the initiative will assist Kioo in meeting the increasing demand in its local markets and create thousands of employment both directly and indirectly throughout its supply chain.
As a part of the World Bank Group, the IFC supports the growth of the private sector in less developed nations by providing investment, consulting and asset management services.
However, Standard Bank Group, which has its headquarters in Johannesburg, bills itself as the biggest bank in Africa and boasts of 161 years of operational efficiency and value.
Additionally, the lender has operations in Tanzania and 20 other sub-Saharan African nations.
The two financial institutions' agreement comes as Kioo's main market for refillable glass containers, East and Central Africa, is expected to experience up to 10% annual growth in the beverage industry over the next five years.
However, a lack of supply in the area implies that imports account for roughly 40% of demand.
One of the few nations in East Africa with a long history of glass production and exports is Tanzania.
The East and Central African region will replace imported glass with locally made glass due to Kioo's increasing production capacity.
"With these reasonably priced products, the project will support the expansion of the beverage business in the area.
According to the statement, Kioo will use energy and locally accessible raw materials to create a value-added product that meets international standards and is exported to the area.
The Minister of Industry and Trade, Dr. Ashatu Kijaji, was present when the funding agreement was signed. He expressed gratitude to the IFC for their efforts to promote Tanzania's private sector enterprises.
Director of Kioo Kumar Krishnan stated that many of the company's clients now choose Kioo over other suppliers and that it was already the largest glass factory in the area.
"This new development will accelerate the growth of the beverage business in East and Central Africa.
The group's sustained faith in Africa and a sustainable future is demonstrated by this investment, the speaker stated.
According to Mr. Henrik Pedersen, the IFC's regional industry director for manufacturing in Africa, East Africa has a great chance to boost employment by reducing the manufacturing sector's supply gap.
In addition to directly assisting with this through the company's expanded capacity, our investment in Kioo will contribute to the strengthening of the glass value chain throughout the region, he stated.
IFC has lent money to Kioo three times now, the first two times to assist the company grow and maintain and replace its equipment.
Kioo currently supplies to the majority of the main global beverage giants in the region and services over 100 customers in 17 countries across all beverage and food sectors, including beer, soft drinks and food jars.
