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South Africa Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 4, 2008 - 44 Pages Table of Contents
AbstractSouth African companies involved in the food industry have recently been looking abroad to otherregional markets for growth opportunities, as discussed in BMI’s recently published South African Food& Drink Report for Q108. First in October, Nampak, Africa's largest packaging producer, announced thatit will invest ZAR600mn (US$68.9mn) to build a beverage can manufacturing facility in Angola, its firstventure in the west African country. The factory will be located in Viana, a newly established industrialarea close to the capital Luanda, and will have an annual production capacity of 700mn cans. The plant,which should be operational by mid 2009, is one of the most significant greenfield investments in thecompany's history. This investment is part of a series of growth initiatives which involve investing inhigh-growth areas and partnering with customers in new territories, with the company investing overZAR1.5bn (US$220mn) this past year. Nampak produces a wide variety of packaging products and hasproduction facilities in Ethiopia, Kenya, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Tanzania,Zambia and Zimbabwe, as demand for its products has been increasing across the continent. Meanwhile,with European and American duty concessions on African imports, the market for African exports hasfurther expanded.Then in November 2007, Illovo Sugar, Africa biggest sugar producer, announced that it will investGBP100mn (US$205.8mn) in building sugar facilities in Mali. Illovo is a leading, global, low-cost sugarproducer and a significant manufacturer of high-value downstream products, with extensive agriculturaland manufacturing operations in South Africa, Malawi, Zambia, Swaziland, Tanzania and Mozambique.The investment will be used for the construction of a new sugar mill as well as for an ethanol plant and anelectricity co-generation unit. Illovo will hold a 70% stake in the investment, while the government ofMali will hold the remainder. The company will also manage a local government-sponsored agriculturaldevelopment project to produce 1.5mn tonnes of sugar cane annually, which will be required by the newfacility. Sugar production should begin by year-end 2009, reaching full capacity within two years. At fullproduction the mill should produce 200,000 tonnes of sugar annually, while the ethanol plant will produce15mn litres annually. Illovo has been steadily expanding its sugar production throughout Africa inanticipation of the EU opening its markets to developing countries starting in 2009. With a current global sugar production deficit, world raw sugar prices have been highly volatile in recentyears, soaring in 2006. With the EU reforming its sugar regime and opening up its markets to developingcountries starting in 2009, there have been growing business opportunities for South African companies.Despite decades of isolation under apartheid, the business infrastructure is modern, enabling South Africato serve as the financial and business hub of the continent. As business opportunities on the continentcontinue to expand, South Africa’s companies will be in a strong position to benefit. Get Full Details About This Report >> |
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