In the wake of economic uncertainty and the need for recovery, The South African Breweries (SAB) has reaffirmed its commitment to ignite the South African economy as it pledges to invest a further R920m into Prospecton and Ibhayi breweries. This ramps up SAB’s total South African investment commitment to R4.5bn – adding impact to an industry that already contributes 1.3% of the national GDP.
This was announced by SAB CEO Richard Rivett-Carnac at the SA Investment Conference on 24 March at the Industrial Development Corporation headquarters in Sandton, 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 says 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. To add to the impact, he says this investment will enable SAB to continue transforming the industry by employing black suppliers such as HTP and Isanti glass.
SAB’s Prospecton Brewery in Durban will receive a bulk of this new investment with a total of R650m that will help expand its facilities. This investment alone will provide a R1.2bn excise tax impact.
A further R270m of this investment will be committed to upgrading SAB’s Ibhayi Brewery which is in the Eastern Cape.
Considering the economic impact of the COVID-19 lockdowns, Rivett-Carnac explains that SAB’s intention is to assist with economic recovery. “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”.
This new investment pledge follows SAB’s commitment to invest R2bn 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.
According to Rivett-Carnac, the beer industry continues to be a key contributor to the South African economy. He cites a recently published Oxford Economics Research paper (2021) which reveals the South African beer industry contributed approximately R74bn 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 R45bn in 2019, this was the equivalent of 3.3% of government revenue.
As one of the country’s largest business’s, Rivett-Carnac says the SAB plays a significant role in igniting economic growth and recovery.
“Our position as an economic-driving, multinational corporation in South Africa means we are keen to play a role in working with our government and social partners to help South Africa recover and grow.”