Construction will start in January 2010 on Nile Breweries' existing site in Jinja, and is expected to be completed towards the end of the year.
Mark Bowman, Managing Director of SABMiller Africa said, "The construction of the new maltings plant in Uganda is further evidence of what can be achieved when African governments and business work collaboratively to benefit the local communities in which we operate.
"This significant investment comes as a direct result of the success we have had in Uganda of the local raw material sourcing strategy which we are seeking to introduce across all of our African operations."
The use of locally sourced raw materials began in 2002 when Nile Breweries launched Eagle Lager and, subsequently, Eagle Extra both of which are brewed using sorghum grown by smallholder farmers in Uganda. Purchases of sorghum by Nile Breweries have multiplied from 1,600 tons in 2003 to a peak of 12,000 tons in 2007 and in doing so provided income of nearly $2m to an estimated 8,000 farmers and associated beneficiaries. This local sourcing model is now being extended to include barley for Nile Breweries' other beer brands, necessitating local malting facilities.
In the 2008 Socio-Economic Impact Study of Nile Breweries Limited operations in Uganda, Professor Ethan Kapstein of INSEAD calculated that the business generated $92m of value added to the Ugandan economy, and directly and indirectly supported 44,000 jobs.