Bay’s Ibhayi Brewery to get R550m cash injection
● Allocation part of SAB’s commitment to invest R5.8bn in SA this year
South African Breweries has announced a commitment to invest R5.8bn in SA this year, with R555m heading to Nelson Mandela Bay for the expansion of the Ibhayi Brewery.
The brewery giant made the announcement at the 2023 SA Investment Conference at the Sandton Convention Centre in Johannesburg yesterday.
The R5.8bn commitment follows the R5.9bn pledged last year, which included a R925m investment in SAB’s Prospecton Brewery in Durban and R510m in the Ibhayi Brewery.
Once completed, the Ibhayi Brewery will have its total production output ramped up from 220-million litres to just under 300-million litres a year.
A new brew house and blending plant are being added as the company prepares to kick start its Project Beyond, which will add Flying Fish and Redds to its lines.
The investment in the Prospecton Brewery is expected to create 25,000 additional jobs while the Ibhayi Brewery investment is projected to create an additional 14,000 jobs throughout the beer value chain across SA.
SAB chief executive Richard Rivett-Carnac said the brewer was proud to support President Cyril Ramaphosa’s investment drive. “We have, for many years, proven our ability to drive economic growth and transformation in an inclusive manner.
“Through knock-on and multiplier effects, our R5.8bn investment is anticipated to contribute billions to our GDP, which, alongside the other investment commitments tabled at the 2023 SAIC, will provide a significant boost to an economy sorely in need of stimulus.”
Of the R5.8bn to be invested by SAB this year, R2.4bn will be allocated to new developments supporting growth and cost initiatives, including a R555m expansion of the Ibhayi Brewery; and R3.4bn will be allocated to sustain SAB’s operations and infrastructure.
“Our commitment to invest a further R5.8bn and our support of the conference demonstrates our belief that the ongoing work with government is creating a conducive operating environment that allows for investments and facilitates the future growth of businesses,” Rivett-Carnac said.
“We are positive about the future of the country and are making further investments because of the potential in SA.
“We are also very aware of the challenges that the country currently faces.
“We cannot talk about a sustainable business environment without addressing the impact that energy, transport, safety and security and water shortages have on our productivity,” Rivett-Carnac said.
“We are encouraged by and supportive of the work of government and the dialogue with government is doing to address the energy and resource challenges, but given where we are more work needs to be done and we will support initiatives that help to maintain the continuity of operations, prevent losses and support economic growth.”
The investment conference is the fifth leg of Ramaphosa’s drive to attract R1.2-trillion in investment. In his opening address yesterday, the president urged domestic and international investors to put their money behind SA despite its energy crisis.
He conceded that loadshedding, which often leaves large parts of the country without power for up to 10 hours a day, and long-standing blockages in SA’s freight and logistics sector, was souring investor sentiment.
“The lack of reliability in electricity supply weakens business and consumer confidence, taints international perceptions about our country and affects investment sentiment and decisions,”
Ramaphosa said. “The Energy Action Plan presents a clear path to reduce the severity and frequency of load-shedding in the short term and achieve energy security in the long term ...
“Our immediate focus is on improving the performance of our existing coal-fired power stations as they continue to provide the base load of our energy.”
The government is targeting R60bn in additional pledges from domestic and international investors with the expectation that the initial R1.2-trillion target set at the inaugural SA Investment Conference will be exceeded.
So far, SA has attracted
R1.14-trillion in pledges over four successive investment conferences, indicating that the investment target set in 2018 is not misplaced.
“Given all that has taken place in the intervening years, it is understandable that investor confidence has been sorely tested,” Ramaphosa said.
“Doubters have had reason to be sceptical. We remain convinced that SA is an investment destination with significant untapped potential.
“We do believe that by leveraging our unique value proposition, we have the ability to attract higher levels of investment.”
To fix the bottlenecks in the logistics sector, Ramaphosa said that a National Logistics Crisis Committee had been established “to drive the implementation of a comprehensive road map for the freight logistics sector”.
Transnet, responsible for transporting crucial minerals from rail to port, is still reeling from years of state capture and corruption under former executives.
Its rail network, which covers domestic and regional corridors and is used to transport commodities for export, remains unreliable to firms in various sectors, causing harm to bottom lines and the economy.