Diageo and Heineken last week officially opened a brewery in South Africa as part of a joint venture. Here are some facts on the ZAR3.5bn (US$473m) brewery.
- The decision to construct the brewery was taken in early 2007 following the return of the rights of the Amstel brand in South Africa to brand owner Heineken and the repatriation of the brand via Brandhouse. Local production of both Heineken and Amstel will fully replace imports of these brands.
- The Sedibeng Brewery is a joint venture between two of Brandhouse’s shareholders: Heineken (75%) and Diageo (25%). It will be managed by an independent team, in association with Brandhouse Beverages, reporting to the shareholders.
- Sedibeng will be responsible for the supply of a range of Heineken, Diageo and Namibia Breweries brands, including Heineken, Amstel and Windhoek lager, as well as Smirnoff Storm and Smirnoff Spin into the South African market.
- The brewery will have an initial capacity of 3m hectolitres, with built-in flexibility to expand. Situated between Vereeniging and Alberton south of Johannesburg, the site covers some 83 hectares and was specifically selected for its general proximity to key distribution channels. Phase two of construction is already under way and is scheduled for completion in “early 2010”.
- A variety of pack sizes will be produced at Sedibeng, including multi-serve (“sharing pack”) bottles that allows for the introduction of a returnables system, as is the norm in the South African beer market. Initially Windhoek and Amstel will be available in the multi-serve bottle size, while in due course, Heineken will also be produced in this pack size.
- The cost of the facility was EUR310m (ZAR3.5bn). Work began in early 2008 and took around 18 months to complete due to a “fast-track” construction programme allowing it to be finished ahead of schedule.
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