SOUTH AFRICA – Dutch brewing company Heineken is set to expand its presence further in the South African market with new plans of constructing a R3.8bn (US$200m) greenfield brewery and a R1.7bn (US$89m) investment into a maltery.

The beer giant, which snapped up Distell and Namibia Breweries recently, announced its R15.5bn (US$820m) investment over five years in the just concluded 2023 South Africa Investment Conference (SAIC), an investment drive seeking to attract R1.2 trillion over five years.

The remaining R10bn in the total investment to boost South Africa’s economic growth would be used for capital expenditure projects to expand and maintain existing operations in South Africa, Heineken SA managing director Jordi Borr said in a statement.

In 2019, Heineken South Africa announced a R1.6bn local investment earmarked for several projects, most notably the extension of its brewery in Sedibeng and the construction of a 6.5-megawatt solar power plant.

The green energy investment will help the second-largest beer company in the world to transition its brewing to an eco-friendlier form of production and help it overarch the looming power cuts that have since grown to be a menace to manufacturers shrinking their profits.

During the takeover of Distell and Namibia Breweries Limited (‘NBL’), Heineken agreed to several public interest commitments, including R10 billion (US$586m) over five years to maintain and grow the productive operations in SA, as well as an employee share ownership scheme that would transfer more than R3 billion equity to its local workers.

Other investments include establishing an R400 million supplier development fund to invest in small businesses, an R200 million (US$11.7m) contribution to promote localization and growth initiatives within the country and invest R175 million (US$10.26m) in a tavern transformation program to create safe, responsible, and sustainable businesses with a positive impact on consumers and society.

Further to that, there will be the establishment of an Innovation, Research, and Development Hub for the African region based in South Africa within five years.

To address employment concerns in South Africa, the merging parties agreed to maintain aggregate employee headcount for five years following the merger and not to retrench any employees below specified managerial grades, which include the bargaining units.

The merged entity also committed that, in the event of any retrenchments, it considers retrenched employees for suitable vacancies in Newco for three years following the merger.

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