South Africa: Heineken eyeing push into KwaZulu-Natal North Coast

The world’s second-largest beer brewer, Heineken, is looking to expand its operations and is eyeing a push into the KwaZulu-Natal North Coast to grow its footprint, North Coast Courier reported.

According to KZN’s Department of Economic Development, Tourism and Environmental Affairs (EDTEA) department head Siza Sibande, the beer giant has plans to expand its geographic footprint to KZN and is exploring one of two possible locations for its production facility.

Sibande confirmed that the proposed shortlisted sites for the new brewery is a site at Inyaninga in eThekwini or a site close to the Gledhow Mill in KwaDukuza. The site belongs to private land owner Royal Shaka Properties.

The two sites were shortlisted from 80 potential locations the company pre-selected. Heineken South Africa recently unveiled a R1-billion expansion plan for its Sedibeng brewery near Johannesburg.

The joint venture with Namibia Breweries that operates the nine-year-old plant will increase its capacity by 25 percent. The facility occupies an 83-hectare site and includes a brewery, production plant and warehouse.

The brewery, which is the largest outside Europe, produces 1.8 billion bottles and cans of its brands a year, which it also exports to regional countries such as Namibia and Botswana. Locally, Heineken employs more than 900 staff and about 600 external sales staff.

Heineken SA managing director Gerrit van Loo would not confirm plans for the KZN operation.

However, according to well-placed sources, Heineken is in negotiations with municipal officials from eThekwini and KwaDukuza, who will foresee the beer-giant’s choice of location providing a massive financial boost for the region. The estimated capital expenditure for the first phase of the new brewery is R3.2 billion.

The company, which has headquarters in Amsterdam, has acquired a number of local beers over the past few years and is looking to upscale its capacity to meet the growing domestic demand for beer.

Heineken says it has a South African market share of 18 percent, and is still a “challenger company” with room to grow.

For the Heineken beer brand, South Africa is one of its top performing countries in terms of its beer sales and is considered a key market for the beer manufacturer.

While Heineken does not provide exact numbers for each of the countries it operates in, in the Dutch parent company’s most recent financial results South Africa featured among the top performers.

The flagship Heineken brand grew by double digits in SA, it said, while Amstel “grew strongly”. Its cider business, which is headlined by Strongbow Apple Ciders, likewise reported strong growth in South Africa.

The Heineken portfolio includes eight brands: Heineken, Amstel, Windhoek, Sol, Miller Genuine Draft, Strongbow Cider, Soweto Gold and Tafel.

Besides the local sourcing of barley, Heineken South Africa already sources sugar locally, and investigates the possibility of locally sourced maize and hops.

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