26 February 2013

South Africa: SAB Plant to Empower Small Farmers

South African Breweries (SAB) is to construct a R700-million maltings plant in Alrode, east of Johannesburg as part of its drive to support the local economy through job creation, as well to help empower small farmers.

The new plant, which is expected to be completed in 2015, will allow SAB to reduce its malted barley imports and develop the local agricultural sector.

"It will allow us to drive even higher local sourcing of barley which will, in turn, help drive the empowerment of small farmers in some of the most poverty-stricken areas of South Africa," SAB executive chairperson Norman Adami said in a statement.

It is estimated that the maltings plant will increase local sourcing of barley from its current 65% to as much as 95%.

"We have been looking at ways to locally source more of our agricultural raw materials, including barley, for some time, building on the work we have been doing with our barley breeding programme and with local farmers to develop competitive local barley varieties," said SAB's managing director, Mauricio Leyva.

"We will partner with leading suppliers to ensure an innovative and cost-efficient design using cutting-edge technology.

"We will also strive to ensure we maximise local industry involvement in the construction of the new plant in order to help develop the communities in which we operate," Leyva said.

The plant will be built next to the existing brewey in Alrode, the industrial suburb of Alberton, and construction is expected to start in mid-2013 when the land ownership transfer has been completed.

The current Alrode plant will be decommissioned once the new one is fully operational.

"The new maltings plant will have significant cost-saving and growth benefits for SAB," Leyva said. "It will allow us to reduce our exposure to volatile international markets and replace a significant share of our imported malt and barley with local barley."

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