Addis Ababa, February 22, 2016 (FBC) - Atlas (AIM, NSE: ADSS), has commenced ground clearing at its 'Chancho Project' in Ethiopia, a new state-of-the-art facility 45km north of the capital, Addis Ababa, which will have capacity to produce 105 million 330ml bottles per annum.
To commemorate this landmark development, an official ground breaking ceremony was held on 15 February 2016 and attended by local dignitaries and members of the Board.
Levelling of the 5.5 acre Chancho Project site has begun and the top soil has been stripped. The work is being conducted through the Company's newly formed industrial division, which is focused on consumer based industrial projects in Africa, in conjunction with the Company's joint venture company, Orchid Group ('Orchid').
The Chancho Project site is located in an established industrial area that is serviced by excellent road infrastructure as well as power. It is also within trucking distance of the intended mine sites for the materials needed to produce high quality bottles, being silica sand, limestone, dolomite, feldspar and soda ash. Preliminary assessments of potential sources and studies of local mining operations carried out confirm appropriate grades of silica sand and limestone are available in deposits 30km away from the site.
An initial pre-feasibility study has been completed at the Chancho Project, which has returned highly positive results. A full feasibility study is now being conducted in tandem with local and international engineering consultants, which is close to completion. Commissioning of the facility has been scheduled for 2018, with full production targeted for early 2019.
Chief Executive of Atlas, Carl Esprey said, "We are delighted to have broken ground at the Chancho Project, our state-of-the-art glass manufacturing facility neighbouring Addis Ababa. The Project has been an excellent acquisition for us, giving us a foothold in the burgeoning Ethiopian consumer market and positioning us at the forefront of advancements in the East African manufacturing sector. We are delighted with the progress that has been made so far and the ground breaking ceremony marks another momentous step in our transition into exciting new territory. We can now look forward to commencing development of the project site over the coming year and updating the market on our progress in due course."
For the last five years, due to increasing consumer demand and a young demographic, Ethiopia has been attracting significant investment from international beverage companies, with over $500 million invested to date. Beer production has been growing at a CAGR of 14.3% over the last 14 years with an additional 47% capacity currently under construction. 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 Ethiopian government has designated manufacturing as a top priority, and support via development debt funding is, in principle, available for projects that substitute imports. Ethiopia represents one of the fastest growing economies in the world, as a result of rising income, population growth, well managed infrastructure spending, and stable government policies.
Posted by Amare Asrat