EAST African Breweries has started the process of selling its glass making business few months after it pumped in Sh1 billion into the subsidiary to refurbish it.
The brewer announced Wednesday that it has signed a definitive agreement for the sale of Central Glass Industries to Consol Glass of South Africa pending sale approvals from regulators and EABL shareholders.
In its half-year investor briefing in February, EABL reported a spending of Sh1 billion to install a new furnace at its glass plant, financed by proceeds from last year's commercial paper issued by the firm.
“After a thorough strategic review, we have made the decision to exit the glass business in order to focus on our core business and unlock additional value for our shareholders. From this arrangement the ownership of CGI will change and therefore CGI will no longer be part of the EABL group of companies,” group managing director Charles Ireland said in a statement.
"Consol is an expert in glass manufacturing and is a significant and respected player in the glass packaging industry. As EABL will remain the primary customer for CGI products we will be able continue to access high quality glass at competitive pricing and we will be able to tap into the benefits of increased efficiencies at the glass plant and any future plans to expand glass manufacturing capacity."
EABL reported a net profit of Sh4.62 billion for the half year period ending December 31, 2014, translating to a growth of 11.1 per cent compared to half year 2013 when it made Sh4.16 billion.
