AFRICA – Varun Beverages Ltd. (VBL), a major PepsiCo franchise bottler, has further solidified its presence in Africa with acquisitions in Tanzania and Ghana.
VBL’s board recently approved the full acquisition of SBC Beverages Tanzania Ltd. (SBCT) and SBC Beverages Ghana Ltd. (SBCG), with investments amounting to Rs 1,304 crore (US$154.5M) and Rs 127 crore (US$15M), respectively.
Both companies specialize in producing and distributing PepsiCo-branded non-alcoholic beverages within their respective countries.
The acquisition of SBCT and SBCG is pending regulatory approvals, including those from PepsiCo Inc., Tanzania’s Fair Competition Commission, and the Tanzania Revenue Authority.
VBL’s latest move aligns with its strategy to expand its footprint across African markets and boost distribution capabilities for PepsiCo products throughout the continent.
Additionally, VBL is enhancing its domestic operations with the acquisition of a full ownership stake in Lunarmech Technologies Pvt. Ltd., a Delhi-based company that produces plastic closures for PET bottles used in VBL’s manufacturing lines.
VBL’s Rs 200 crore investment will secure the remaining 39.93 percent stake in Lunarmech, elevating it to a wholly-owned subsidiary and strengthening VBL’s supply chain in India.
The acquisitions follow VBL’s recent US$50 million investment announcement for a new Pepsi production plant in Kiswishi City, Democratic Republic of the Congo (DRC).
The facility, located within the Kiswishi City Special Economic Zone, will cover 15 hectares and provide strategic access to Lubumbashi, Haut-Katanga Province, and other surrounding regions.
VBL also inaugurated a bottling plant in Kinshasa in September 2024, with a production capacity of 1.2 million bottles per day.
In addition to its recent expansion, VBL entered an agreement with PepsiCo in July to manufacture and distribute snacks in Zimbabwe and Zambia, marking its growing portfolio beyond beverages in African markets.
In the third quarter of calendar year 2024, Varun Beverages’ net profit rose 24% year-on-year to Rs 6.20 billion (US$73.8 million), surpassing analysts’ expectations of Rs 5.76 billion (US$80.4M), according to LSEG data.
The company’s overall sales volume rose by nearly 22 percent to 267.5 million cases, driven by strong demand from its international markets, particularly in Africa.
The company’s revenue from operations increased by 25 percent, reaching nearly Rs 50 billion (US$594.7M), partly due to contributions from South Africa-based BevCo.
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