South African Breweries outlines R4.5 billion commitment to South African economy

  • 28 March 2022 / News / 416 / Fares RAHAHLIA

South African Breweries outlines R4.5 billion commitment to South African economy

The South African Breweries (SAB) has reaffirmed its commitment to the South African economy through a R920 million investment into Prospecton and Ibhayi breweries – taking its investment commitment to R4.5 billion.

SAB CEO Richard Rivett-Carnac said that the industry already contributes 1.3% to the national GDP. He was speaking at the SA Investment Conference, held at the Sandton Convention Centre, Johannesburg.

“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.”

Carnac said this new investment commitment will inevitably have an impact on jobs through direct and indirect employment – adding to the already 250,000 jobs sustained by the national beer sector. He said this latest investment will enable the continued transformation of the industry by employing black suppliers including HTP and Isanti glass.

SAB’s Prospecton Brewery in Durban will receive a bulk of this new investment (R650 million) to help expand its facilities. This investment alone will provide R3.1 billion additional tax revenue and generate 24,000 jobs through the full value chain, the group said. It will also generate R4.4b billion in additional GDP for the Kwa-Zulu Natal economy, the brewer said.

A further R270 million will go towards upgrading SAB’s Ibhayi Brewery which is in the Eastern Cape.

“The budget delivered by the minister of finance in February ensured that economic recovery was prioritized by keeping the beer excise adjustment closer to inflation. 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,” Rivett-Carnac said.

This new investment pledge follows SAB’s commitment to invest R2 billion into capital expenditure projects in their 2021 financial year, which it channeled into several upgrades at its operating facilities and providing some exciting product innovations.

Rivett-Carnac noted that the beer industry continues to be a key contributor to the local economy, citing a recent Oxford Economics Research paper which showed that the beer industry contributed approximately R74 billion to the country’s GDP in 2019 – equivalent to 1.3% of national GDP.

The sector sustained over 248,000 jobs in 2019, equivalent to 1.5% of national employment, while the tax impact was approximately R45 billion in 2019, this was the equivalent of 3.3% of government revenue.

source: businesstech

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