Heineken has pledged major capital investment in South Africa, announcing the planned construction of a brewery and a maltery.
At the South Africa Investment Conference, the Dutch brewer said it will invest R15.5bn ($856.6m) into the country over the next five years.
The funding will be spread across several projects including supporting the brewer’s current infrastructure in the country.
However, of that investment, $210m will be used to construct a brewery at a new undisclosed site in South Africa.
A further $94m has been flagged for the establishment of a maltery. This project will be done in collaboration with an unannounced international specialised malting group.
Heineken said the remaining $555.4m will be used on “capital expenditure projects” at its existing operations in South Africa.
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Heineken’s flagship brewery in the region is located in Sedibeng, just outside of Johannesburg. Sedibeng’s capacity was increased in 2020 from 5 million hectolitres (hl) to 8.5 million hl. The site not only supplies South Africa but exports to neighbouring markets.
The group has also invested in a number of local brewers in the region. In 2017, Heineken acquired South African breweries Stellenbrau and Soweto Gold. Heineken also has a stake in the Cape Town craft brewer Jack Black.
“We remain committed to developing new business in local markets, as well as to build talent, create new employment opportunities and have an overall positive effect on South Africa’s economy,” said Jordi Borrut, the managing director of Heineken’s business in South Africa.
“Projects such as our Sedibeng expansion are the manifestation of these goals. We will continue to drive more sustainable operations as part of Brewing a Better World sustainability initiative, and facilities like our solar plant and wastewater facility are helping to protect vital resources.”
Last month, Heineken got the all-clear from South Africa’s Competition Tribunal to proceed with its takeover of the Distell Group and Namibia Breweries.
Distell is a major player in ciders, flavoured alcoholic beverages, wines and spirits across the continent, while Namibia Breweries is the beer market leader in Namibia.
Due to be completed this month, the deal will see a new company formed, of which Heineken will own 75%, the remaining stake held by Distell’s shareholders who reinvest.
The deal was provisionally approved by South Africa’s Competition Commission in September on the condition Heineken sells its Strongbow cider business in South Africa and other countries that are members of the Southern African Customs Union. Heineken intends to divest the Strongbow brand in Botswana, Lesotho, Namibia, South Africa, Swatini, Zambia and Zimbabwe to an independent licensee.