Corporate News
Atlas Development & Support Services chief executive Carl Esprey. PHOTO | SALATON NJAU
By VICTOR JUMA, vjuma@ke.nationmedia.com
In Summary
Nairobi Securities Exchange (NSE) listed Atlas
Development & Support Services (ADSS) says it has acquired a licence
to build a glass manufacturing plant in Ethiopia.
The company, which is dual-listed on the London Stock
Exchange (LSE), said the Ethiopian government has granted it a 13.5-acre
land lease for 100 years.
ADSS said it plans to supply Ethiopia’s growing
beverage industry that currently imports substantial quantities of glass
bottles.
“The grant of our land lease and construction
licence at our Chancho project marks a landmark moment in the
development of this state-of-the-art bottling facility, which will
cement our diversification into the highly prospective industrial
space,” said CEO Carl Esprey in a statement.
The glass plant will be one of its first operating
units after the company closed its Kenyan subsidiaries that are now set
for liquidation.
The closure of its Kenyan support services
subsidiaries Ardan Logistics, Ardan Medical Services and Ardan Civil
Engineering led to the retrenchment of some 750 employees.
Kenyan creditors who are owed hundreds of millions
of shillings have asked for government help to recover their funds from
the UK company.
ADSS took the drastic action following the downturn
in the oil prospecting sector on which it relied on, offering services
to clients like Tullow Oil.
The company’s net losses widened to $9.6 million
(Sh980 million) in the year ended June 2015 compared to $5.8 million
(Sh591 million) a year earlier as operating expenses grew faster than
revenues.
ADSS says international beverage companies have
invested more than $500 million (Sh51 billion) in Ethiopia over the past
five years, attracted by its fast economic growth rate. They include
Heineken, Diageo and Bavaria.
ADSS plans to supply glass bottles to the beverage
firms, saying local production has a price advantage compared to
importation.
“The demand for glass bottles is largely unmet by
local production and is at present mainly satisfied by expensive
imports. There is strong demand for locally produced glass bottles in
Ethiopia which Atlas aims to meet, through the development of the
Chancho project,” the company said.
ADSS says the plant is expected to have a capacity
to produce 105 million 330ml bottles per annum and is scheduled to start
full production in early 2019.
The firm estimates the factory to cost $42 million
(Sh4.2 billion), with the funds to be raised from a mix of debt and
equity transactions.
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