R2.8bn

CityPress - - Business -

LAST WEEK, SA BREW­ERIES,

A SUB­SIDIARY OF AB INBEV, AN­NOUNCED THAT IT WOULD IN­VEST R2.8 BIL­LION IN BREW­ERY EX­PAN­SIONS AT ITS AL­RODE AND ROSS­LYN BREW­ERIES IN GAUT­ENG AND WOULD IN­TRO­DUCE TWO NEW PACK­AG­ING LINES FOR RE­TURN­ABLE GLASS BOT­TLES hap­pen in the near fu­ture.

Tadeu said R1.3 bil­lion would be spent on the Al­rode ex­pan­sion and R1.5 bil­lion on Ross­lyn.

Asked about un­der­tak­ing an ex­pan­sion dur­ing the cur­rent re­ces­sion, Tadeu said AB InBev was tak­ing a longterm view on the up­grades at the two lo­cal brew­eries.

Craig Read, pro­ject man­ager at Al­rode, said AB InBev de­cided on the R2.8 bil­lion in­vest­ment in Novem­ber.

The ex­pan­sion started in De­cem­ber when all the ma­jor or­ders re­lated to the pro­ject were un­der­taken, with ac­tual con­struc­tion hav­ing be­gun in Fe­bru­ary.

The Al­rode pack­ag­ing line would be ready next month, while the Ross­lyn line was sched­uled for com­ple­tion in Jan­uary, Read said.

No new brands would be in­tro­duced as part of the Al­rode ex­pan­sion, he added.

Ac­cord­ing to San­der­son, the pro­ject will re­sult in Al­rode and Ross­lyn’s beer out­put ca­pac­ity in­creas­ing from 8 mil­lion to 10 mil­lion hec­tolitres, with SAB’s lo­cal beer out­put ris­ing from 28 mil­lion to 32 mil­lion hec­tolitres.

Given the re­ces­sion and the in­crease in lo­cal beer sup­ply thanks to the above­men­tioned ex­pan­sion pro­jects, City Press asked San­der­son if this would re­sult in lower beer prices.

“SAB re­views its pric­ing reg­u­larly and tends to have one or two price ad­just­ments each year,” he said.

“It is not pos­si­ble to com­ment at this stage on beer prices in the fu­ture.”

Heineken is AB InBev’s key com­peti­tor in the lo­cal mar­ket.

Ruud van den Ei­jn­den, the man­ag­ing di­rec­tor of Heineken SA, de­clined to com­ment on the ex­pan­sion in AB InBev’s beer pro­duc­tion and its im­pact on mar­ket dy­nam­ics.

Van den Ei­jn­den said Heineken was also ex­pand­ing its beer and cider out­put at its Sed­ibeng Brew­ery plant in Gaut­eng.

David Wil­son, the head brewer for craft beer com­pany Cop­per­lake Brew­ing Com­pany in Four­ways, said the ex­tended pro­duc­tion ca­pac­ity at Al­rode and Ross­lyn was un­likely to have an ef­fect on South Africa’s craft beer in­dus­try, which makes up less than 1% of the lo­cal beer mar­ket.

Wil­son said since craft beers were pre­mium beers, they were priced a lot higher than nor­mal beer. Also, the ex­pan­sion at Al­rode and Ross­lyn catered to a high-vol­ume beer mar­ket, so prices were cheaper.

“The ex­pan­sion in beer sup­ply is in a dif­fer­ent price bracket from the craft beer mar­ket,” he said.

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