The South African Breweries (SAB) has reaffirmed its commitment to invest a further ZAR 920 million (USD 63m) into its Prospecton and Ibhayi breweries. This ramps up SAB’s total South African investment commitment to ZAR 4.5 billion (USD 307m) – adding impact to an industry that already contributes 1.3% of the national GDP, SAB CEO Richard Rivett-Carnac said at the SA Investment Conference yesterday.
SAB’s Prospecton Brewery in Durban will receive a bulk of this new investment with a total of ZAR 650 million (USD 44m) that will help expand its facilities. A further ZAR 270 million (USD 18m) of this investment will be committed to upgrading SAB’s Ibhayi Brewery which is in the Eastern Cape.
This new investment pledge follows SAB’s commitment to invest ZAR 2 billion (USD 136m) into capital expenditure projects in their 2021 financial year, which it channeled into several upgrades at its operating facilities and providing some exciting product innovations.
“These investments will give us the capacity to not only contribute to the economy but also to be able to contribute to job creation, tax, excise and procurement spend,” Carnac said.
He pointed out that this new investment commitment will inevitably have an impact on jobs through direct and indirect employment – adding to the already 250 000 jobs sustained by the national beer sector. To add to the impact, he says this investment will enable SAB to continue transforming the industry by employing black suppliers such as HTP and Isanti glass.
South African Breweries is clear market leader in its home country but has come increasingly under pressure by Heineken that successfully tries to capture a bigger market share. In November, the Dutch brewer announced to have entered into an implementation agreement with Distell Group Holdings Limited, Namibia Breweries Limited (NBL) and Ohlthaver & List Group of Companies (O&L) to integrate their respective and relevant businesses in Southern Africa into one enlarged company. (inside.beer, 15.11.2021)
According to Rivett-Carnac, the beer industry continues to be a key contributor to the South African economy. He cites a recently published Oxford Economics Research paper (2021) which reveals the South African beer industry contributed approximately ZAR 74 billion (USD 5bn) to South Africa’s GDP in 2019. This was equivalent to 1.3% of national GDP. The sector sustained over 248 000 jobs in 2019, equivalent to 1.5% of national employment. The tax impact was approximately ZAR 45 billion (USD 3bn) in 2019, this was the equivalent of 3.3% of government revenue.