SAB commits R920m
GROUP UPS LOCAL INVESTMENT COMMITMENT TO R4.5BN
Company’s intention is to assist with the country’s economic recovery.
South African Breweries (SAB) announced a further investment of R920 million into the local economy on Thursday, with the money earmarked for expansion and upgrades to its Prospecton and Ibhayi plants, located in Durban and Gqeberha in the Eastern Cape.
Revealing the new investment during the fourth SA Investment Conference in Sandton, SAB chief executive Richard Rivett-Carnac said this effectively ramps up SAB’s total investment commitment in SA to R4.5 billion.
The investment by SAB, which is controlled by JSE-listed global alcohol giant Anheuser-Busch InBev SA/NV, comes despite the impact of Covid lockdowns and related liquor bans which have seen the industry lose billions of rand in sales over the last two years.
It also comes in spite of the riots, with SAB’s premises at Prospecton and Pietermaritzburg being targeted last July.
“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,” said Rivett-Carnac.
According to SAB, its Prospecton brewery in Durban will receive the bulk of this new investment, with R650 million to expand facilities.
“This investment alone will provide a R3.1 billion additional tax revenue and generate 24 000 jobs through the full value chain,” it said. “Additionally, the investment will generate R4.4 billion in additional GDP [gross domestic product] for the KwaZulu-Natal economy.”
A further R270 million will be committed to upgrading the Ibhayi brewery.
Rivett-Carnac said this investment commitment will inevitably have an impact on jobs through direct and indirect employment – adding to the 250 000 jobs already sustained by the national beer sector.
The investment will also enable SAB to continue transforming the industry by employing black suppliers such as HTP and Isanti glass. Rivett-Carnac said SAB’s intention is to assist with economic recovery.
“The budget ... ensured economic recovery was prioritised by keeping the beer excise adjustment closer to inflation,” he said. “This has provided us with the financial space to grow the beer category responsibly and aid our
government in our collective mission towards economic recovery and growth.”
This pledge follows SAB’s commitment to invest R2 billion into capital expenditure projects during its 2021 financial year. That investment was channelled into upgrades at operating facilities and “exciting product innovations”.
A recently published Oxford Economics Research paper (2021) reveals the SA beer industry contributed approximately R74 billion 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 R45 billion in 2019, this was the equivalent of 3.3% of government revenue.”
Beer excise adjustment provided space to grow responsibly