South Africa: Heineken pledges to invest R15.5 bln in South Africa expansion

Dutch brewer Heineken has pledged to invest R15.5 billion in the expansion of their breweries and beverages manufacturer lines in South Africa, Moneyweb reported.

The investment – which is also linked to its recent R38.22 billion acquisition of the Distell group – was announced at the fifth South African Investment Conference held at the Sandton Convention Centre on April 13.

“This investment underscores our continued belief in the development and sustainability of South Africa. The 2023 SA Investment Conference is an incredible showcase of how private sector investment can help to transform a country and its economy,” Heineken SA managing director Jordi Borrut said in a statement.

“We are honoured to take part in this journey and invest further into South Africa – alongside the region as a whole. We fully support the conference’s overall goals of socio-economic development, creating sustainable jobs, reducing poverty, and driving back inequality,” Borrut aded.

South Africa’s competition authorities gave Heineken the go-ahead to buy Distell – which was once listed on the JSE – but only if Newco, the company which Heineken South Africa and Namibia Breweries are merging under, committed to investing in the local breweries and beverages sector.

One of the public interest conditions to the sale set by the Competition Tribunal was for the brewer to commit to a cumulative capital expenditure of R10 billion, to “maintain or grow the aggregate productive capacity of the current proprietary production and manufacturing operations of the merger parties in South Africa together with their productive capacity.”

The tribunal also stipulated that the Dutch company invests R3.8 billion in the planning, development and construction of a new greenfield brewery and R1.7 billion in a new greenfield malting plant in South Africa.

Heineken is expected to deliver on these investments over a five-year period.

Also making a pledge at the conference was local brewery South African Breweries (SAB) which pledged to invest R5.8 billion to expand its brewing plants across the country.

Closing out the category’s investment plans this year was chicken producer RCL Foods, which committed to investing R620 million in its Rainbow Chicken facility in KwaZulu-Natal.

The sector’s investment pledges formed part of many made by the mining, construction, financial services and education sectors during the morning session of the conference.

13 April, 2023