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South Africa: Heineken Breaks Ground in Sedibeng
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Business Day (Johannesburg)
27 March 2008
Posted to the web 27 March 2008
Nicola Mawson
Johannesburg
INTERNATIONAL brewer Heineken's proposed new 3-million-hectolitre brewery is set to be built in the Sedibeng district outside Johannesburg.
The brewery -- estimated to cost about R3bn -- will be jointly developed by Heineken and international spirits company Diageo. It will be 75% owned by Heineken, with Diageo holding a 25% stake.
Heineken, Diageo and Namibia Breweries, parents of local marketing and distribution company brandhouse, will invest about R4,7bn to build the brewery and form a marketing and distribution joint venture.
The brewery will initially have a capacity of 3-million hectolitres, but its construction will allow for expansion. It will brew Heineken, Amstel and other brands within the stable.
The Sedibeng district is about 60km southeast of Johannesburg and encompasses Heidelberg, Sharpeville and Vanderbijlpark. The site, on the R59 freeway, is 80ha in size .
The companies aim to complete construction by the end of next year, but face power and construction challenges. However, brewery GM Johan Doyer was confident the project would be completed on time.
Heineken's Africa and Middle East regional president, Tom de Man, said the region would benefit from construction of the brewery. It was expected to create 225 permanent jobs as well as a "considerable number" of service-related opportunities.
Heineken will provide technical training locally and abroad for South African staff.
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Chris Gilmour, an analyst with Absa Asset Management Private Clients, said the companies were under pressure to build a brewery as fast as possible as Heineken was absorbing the cost of importing Amstel.
The company had also considered a site in Ekurhuleni. This site was still under consideration and it might be used as a distribution centre, Gilmour said.
There was also a possibility the companies could form another venture with Budweiser brewer Anheuser-Busch for the 2010 World Cup, Gilmour said.
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