Beer maker EABL has advertised for a multibillion-shilling transport and logistics contract in a move that could raise competition for some of its current carriers.
The winner of the lucrative contract will join global logistics firm DHL that was in 2011 appointed to cover most of EABL’s distribution routes.
EABL spent Sh5.2 billion on distribution and warehousing in the year ended June, indicating the lucrative nature of the contract for transporting the brewer’s products across the country.
“The Expression of Interest (EOI) is for distribution routes not covered by DHL,” said Joyce Gathigi, EABL’s procurement director.
The beer maker, one of the largest fast-moving consumer goods manufacturers in the region, outsources its distribution function mainly to big logistics firms.
Ms Gathigi said the brewer could appoint one or more firms to cover such routes, noting that DHL is also free to apply for destinations it is not already serving.
The winner(s) will be handed a three-year contract that will be subject to annual renewal.
EABL says it expects to award the contract on January 15. The contracts will be based on estimated annual volumes of crates at more than 10 million for all the routes.
Tender documents show that the brewer is seeking transporters for more than 100 routes, connecting its Nairobi glass and alcohol plants to tens of towns across the country.
EABL has a malting plant in Industrial Area, Nairobi, while the main factory is located in Ruaraka.
The firm’s Central Glass Industries is located in Kasarani. Beer, keg, spirits and glass are transported from the plants to numerous locations including Moyale, Kakamega, Kisii, Kinangop, Njoro, Kisumu and Homa Bay.
EABL terminated distribution contracts for SDV Transami and Nairobi Securities Exchange-listed Express Kenya in 2011 and replaced them with DHL.
The move plunged Express Kenya into losses as the EABL contract accounted for more than half of its revenues.
Loss of the contract has forced Express Kenya to change its business model, with the company saying it will venture into property development. It announced the planned construction of 1,200 houses on its 15-acre land in Nairobi’s Industrial Area in the medium term.
EABL appears keen on appointing multiple firms to handle its distribution and logistics needs, with the latest tender coming after the firm announced earlier that it would cut costs in its operations including the transport budget.
Business Daily, Kenya
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