Distell invests US$1.5m in waste water treatment and reuse to address shortage

SOUTH AFRICA – South Africa’s leading producer of spirits, fine wines, ciders and ready-to-drinks (RTDs), Distell has invested US$1.54 million in waste water treatment and re-use programmes to check on supply shortages experienced especially during drought seasons.

Business Day reports that the move further mitigates against further water supply risks seen in the drought-hit Western Cape, where there was shortage in the supply of grapes and wine affecting Distell’s operation in the medium term.

“The current 38.1% reduction in water usage as of June 2018 in the Western Cape has been achieved by accelerating the water management programme through demand reduction management and new water-saving initiatives.

“Certain water-intensive production activities have also been relocated to areas with sufficient water supply,” said the company in financial results release.

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The company said it expects challenges in the short to middle term, arising from volatility of the rand, higher grape prices as a result of the Western Cape drought and water shortages.

For the year ended June, the company said African markets outside of South Africa delivered excellent results, growing revenue by 19.5% on sales volumes which were up by 7%.

Kenyan KWAL stake

The results were also driven by inclusion of KWAL (Kenya Wine Agencies Limited) Holdings in Kenya which it acquired in April 2017.

The African liquor giant bought 26.43% KWA Holding East Africa Limited (KWAL) from Centum Investment Company Limited giving it a majority shareholding of 52.43% in KWAL.

It had previously acquired a 26% stake from Industrial and Commercial Development Corporation (ICDC) in 2014.

KWAL owns a portfolio of leading local brands such as Kibao, Kingfisher and Caprice which have shown strong growth in recent years, benefiting from the Kenyan rich economy and attractive alcoholic beverage industry.

Distell produces brands like Amarula, 4th Street, Hunter’s, Klipdrift, Nederburg, Richelieu, Savanna, Viceroy, and JC Le Roux.

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Headline earnings per share from continuing operations however, declined by 6.3% to 669.9cents a share, down from 714.8c last year.

Meanwhile in South Africa, domestic market revenue increased by 10.1% and sales volumes rose by 4.4%, while the economy continued to show low gross domestic product growth against increased costs of living placing pressure on consumer disposable incomes.

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