Heineken to expand capacity in South Africa brewery as its market grows

Heineken NV has announced it will spend US$67m in South Africa to expand capacity at its Sedibeng brewery.

The company produces ciders and beer at the brewery it co-owns with Namibia Breweries Limited (NBL). Some of its brands include Heineken, Amstel, Windhoek and Strongbow. The plan is to enlarge the brewery’s capacity from 5.3m hectoliters to 7.5 million hectoliters per year to accommodate demand.

Construction has already commenced at the 9-year old brewery which was built in 2009 as a joint venture between Heineken, Diageo and Namibia Breweries Limited.

The Managing Director, Heineken South Africa, Gerrit van Loo, said Heineken has enjoyed “quite good growth over the years”, with its beer accounting for 18% of the local beer market.

He added that the investment was crucial to regional growth and the local economy. He was confident that the company was no longer a small player in a country dominated by SA Breweries, which is owned by Anheuser-Busch InBev.

“We are no longer a small mouse. We have been able to compete with the elephant which is AB InBev,” he said, adding that competing with the company had been “extremely difficult” due to its scale.

Diageo left the partnership in 2015 as its spirits business grew and it felt it had the scale to go it alone. Heineken owns 75% of Sedibeng, while its joint venture partner Namibia Breweries holds the remaining 25%.

“We are hugely optimistic about South Africa based on our performance in the last three years,” said Gerrit van Loo.

“South Africa is identified as a country that can play a role in our international growth strategy. Our brands, both in beer and cider, are enjoying a high level of acceptance by South African consumers.”

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