KWAL Anticipates Local Manufacturing at Tatu City Factory

Kenya Wines Agencies Limited (Kwal) will start to locally manufacture most of all imported brands after acquiring Sh1.1 billion property in Kiambu.

The strategy shift comes after supply constraints of its wines and spirits brands in 2020 due to the Covid pandemic. The pandemic further led to an increase in shipping days from one to three months.

The manufacturing which will see Kwal source raw materials, bottles, and labels locally, will be carried out at the factory undergoing construction at Tatu City. Its completion is expected by August.

“With Covid-19, we saw a lot of delays at the port of Durban that impacted the lead times between us and South Africa. We had to write up some of the products because they had almost expired by the time they got here,” said Kwal managing director Lina Githuka.

“The positive aspect of that it forced us to look at our supply chain, with the objective of making it more agile and more reliable.”

Distell Group, a South African beverage firm, has the lion’s share of Kwal with a 55 percent stake. The Kenyan government owns 42.65 percent through the Industrial and Commercial Development Corporation (ICDC).

Its categories of products are wines, spirits, and ready-to-drink juices. Most of the brands are imported with others like Caprice Wine and Cellar Cask bought in bulk, blended, and packaged in Kenya.

Under the localization plan, wine brands such as 4th Street, Drostdy-Hof and alter wine used in churches, and spirits including Viceroy brands, Amarula, Scottish Leader, and Cruz Vodka will be processed and packaged at the Tatu City factory.

However, the localization will not include premium wines such as Nederburg and Durbanville Hills that are bottled and housed in South African vineyards.

The plan will require heavy investment in machines, supplier development, and ratification from brands’ brewers in order to produce to global standards.

Kwal is already producing and packaging Hunters brand and will in three weeks begin manufacturing the Savannah Dry brand.

“For us to be able to manufacture locally, we have to demonstrate that we can manufacture to global standards. So it goes through a very rigorous certification process that enables you to be certified,” said Ms. Githuka.

Localization is expected to increase competitiveness which can be achieved through pricing and make the firm more profitable.