Varun Beverages invests US$48.19M in South African subsidiary Bevco to boost growth

SOUTH AFRICA – Varun Beverages Ltd (VBL), the largest bottler of PepsiCo in India, has announced an investment of Rs 412.80 crore (US$48.19M) in its South African subsidiary, The Beverage Company Proprietary Limited (Bevco).  

This strategic move aligns with VBL’s commitment to strengthening its international presence while enhancing its domestic and global operations. 

Bevco, which holds franchise rights from PepsiCo for South Africa, Lesotho, and Eswatini, is involved in manufacturing and distributing PepsiCo’s licensed products and its own non-alcoholic beverages in South Africa.  

In a regulatory filing, VBL disclosed that it has subscribed to 19.84 lakh ordinary shares of Bevco, increasing its shareholding by 2.42 percent. 

According to VBL, the investment will enable Bevco to repay its existing debt and support its future business growth.  

“Bevco has allotted 19.84 lakh ordinary shares to VBL, and this fresh investment will help Bevco to repay its existing debt and strengthen its balance sheet for business growth,” the company said in a statement. 

This development follows VBL’s acquisition of Bevco in December 2023 at an enterprise value of Rs 1,320 crore (US$154.1M).  

Promoted by the Jaipuria family, VBL accounts for 90 percent of PepsiCo’s beverage sales volume in India and has been actively expanding its footprint in international markets, particularly in Africa. 

In December 2024, VBL commissioned two new production lines at its Zimbabwe plant to boost the output of its Aquaclear bottled water and sparkling soft beverages.  

The company also solidified its presence in Africa with the full acquisition of SBC Beverages Tanzania Ltd. (SBCT) and SBC Beverages Ghana Ltd. (SBCG), investing Rs 1,304 crore (US$154.5 million) and Rs 127 crore (US$15 million), respectively. 

Additionally, VBL invested US$50 million in a new Pepsi production facility in Kiswishi City, Democratic Republic of the Congo, earlier in 2024.  

Spanning 15 hectares in the Kiswishi City Special Economic Zone, the facility serves Lubumbashi, Haut-Katanga Province, and surrounding areas. 

In the third quarter of 2024, VBL reported a 24 percent year-on-year rise in net profit to Rs 6.20 billion (US$73.8 million), driven by robust demand from its international markets, particularly in Africa.  

The company’s sales volume increased by 22 percent to 267.5 million cases, while revenue from operations rose by 25 percent to nearly Rs 50 billion (US$594.7 million), partly due to contributions from South Africa-based Bevco.

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