South African Business 2018 edition
Welcome to the sixth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. Visit www.globalafricanetwork.com for more business and investment news, opportunities and events.
Welcome to the sixth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za.
Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com.
First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za
Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. Visit www.globalafricanetwork.com for more business and investment news, opportunities and events.
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OVERVIEW<br />
Food and beverages<br />
Consumer companies are looking to Africa for growth.<br />
Global consumer goods company Unilever has invested<br />
nearly R4-billion in recent years, including R600-million in<br />
a Gauteng ice-cream factory that will boost the company’s<br />
drive into Africa.<br />
This highlights a trend across the food and beverage sector. In 2016<br />
Nestlé <strong>South</strong> Africa invested R1.2-billion in adding instant coffee to<br />
the products it makes in <strong>South</strong> Africa. Heineken’s fairly new brewery<br />
in Gauteng is already undergoing expansion, with cider production<br />
set to increase.<br />
The food and beverage sector experienced 18% growth from 1996<br />
to 2013. A very serious drought and higher input costs led to tough<br />
conditions for companies in the sector in the six months to June 2017.<br />
An Ernst & Young analysis of consumer products companies with collective<br />
annual revenues of R180-billion stated that the period had been<br />
“one of the weakest” because of a combination of political, economic<br />
and climate conditions.<br />
Some of the biggest companies in the sector are Tiger Brands, RCL<br />
Foods, Pioneer Foods, Clover, AVI and Astral. According to the EY report,<br />
the industry’s revenue comes mostly from agri-business (25.8% of total<br />
industry revenue), diversified companies (23%), food producers (13.6%),<br />
beverage producers (12.5%) and sugar producers (8.9%).<br />
The food and beverage sector is responsible for 24.4% of total<br />
manufacturing production and employs 230 000 people. Beverages<br />
account for just over 4% of all manufacturing sales while food is responsible<br />
for 13.5%. Within the sector, beverages accounts for 24%<br />
of sales. One quarter of the 37% of national GDP that is generated by<br />
agri-industries derives from agri-processing.<br />
Gauteng, the Western Cape and KwaZulu-Natal are the leading<br />
provinces, with about half of the companies in the sector located<br />
in Gauteng.<br />
ONLINE RESOURCES<br />
Agricultural Research Council: www.arc.agric.za<br />
FoodBev SETA: www.foodbev.co.za<br />
National Agricultural Marketing Council: www.namc.co.za<br />
SECTOR INSIGHT<br />
Agri-business contributes<br />
a quarter of revenue in the<br />
sector.<br />
The <strong>South</strong> <strong>African</strong> beer market<br />
is growing by 1.5% per year.<br />
Key players in the industry in<br />
<strong>South</strong> Africa include <strong>South</strong><br />
Africa Breweries (SAB) (malt<br />
beer), United National Breweries<br />
(sorghum beer), Distell (spirits and<br />
flavoured alcoholic beverages, or<br />
FABs) and Brandhouse (malt beer,<br />
spirits and FABs). SAB became part<br />
of Anheuser-Busch in 2016.<br />
RCL Foods, formerly Rainbow<br />
Chickens, has been on an aggressive<br />
run of acquisitions. RCL is reconsidering<br />
its business model<br />
with a thought to producing<br />
fewer frozen chickens and doing<br />
more in the fast-food sector.<br />
The fast-food and familyrestaurant<br />
franchise sectors are<br />
sophisticated and cover a broad<br />
range, from the indigenous<br />
Spur and Nando’s brands to international<br />
giants such as KFC,<br />
McDonald’s and recent arrival of<br />
Burger King.<br />
Wimpy is the second largestfranchise<br />
operation in SA (after<br />
KFC).<br />
SOUTH AFRICAN BUSINESS <strong>2018</strong><br />
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