INDUSTRY: Appletiser Production to Be Increased By 82%
Recent Western Cape Business News
ECONOMIC DEVELOPMENT Minister Ebrahim Patel received a first-hand view of local benefits flowing from the creation of Coca Cola Beverages SA (CCBSA) when he visited the Appletiser plant in Elgin.
The plant is set to almost double annual production by October as a result of its integration into the CCBSA supply chain grid.
Appletiser SA, a wholly owned subsidiary of CCBSA following the merger last year of the non-alcoholic ready to drink bottling operations of The Coca-Cola Company, SABMiller plc and Gutsche Family Investments to form CCBSA, produces 59 percent of all Tiser products for domestic and global distribution at the Elgin plant.
There are plans in place for Elgin to produce additional Coca-Cola brands (in addition to Tisers) that are currently produced at the other CCBSA manufacturing sites. With the addition of 200ml, 330ml and 440ml cans of other Coca-Cola products, the facility will produce well in excess of prevailing volumes at the time of the merger.
Minister Patel is being introduced to Appletiser SA’s new black empowerment partners following the sale of a 21.5 percent stake in May. CCBSA sold 17.5% of its shareholding in Appletiser South Africa to black owned investment company African Pioneer Group and 4% to a new entrant black empowerment partner, Sipho Excellent Madlala, a 20-year veteran of the company.
The sale of the equity stakes was sealed after a rigorous process of evaluation and selection, facilitated by Standard Bank.
It meets one of the merger conditions agreed to with the Competition Tribunal in relation to the creation of CCBSA last year.
CCBSA Managing Director Velaphi Ratshefola said that the company was confident that Appletiser SA has the capacity to increase production output considerably to serve the domestic market and to be used as a base for export to the rest of the continent and elsewhere in the world.
Appletiser has a commitment in terms of the merger agreement to maintain procurement of at least 80 percent of apples, pears, grapes and similar fruit inputs used for juice concentrate used in Tiser products from South Africa.
Currently all apple and pear concentrate is sourced from South Africa, with grape concentrate increasingly sourced locally, depending on availability and affordability of supply. Since the time of the merger in May 2016, Appletiser’s contractual obligations in terms of local procurement of grapes used for juice concentrate for Grapetiser has increased significantly from 11% to 43%.This percentage will continue to increase in the next few years as agreed with the Competition Tribunal.
Apart from Elgin, the Tiser brands are produced at another South African facility in Midrand, and at facilities in the UK, Canary Islands, Belgium and Australia. Tiser products produced at ASA are marketed in a range of territories including Botswana, Namibia, Zambia, Lesotho, Mozambique, Japan, Australia, New Zealand, Hong Kong, Mauritius and Swaziland.
Launched in 1966 as the country’s first and only premium sparkling 100% single fruit juice brand, Appletiser has a dedicated consumer base, and holds its premium position largely due to the proprietary techniques that are used in the formulation of Tiser products, which have made it possible for the company to ensure consistent flavour and aroma.
Appletiser is a leading soft drink that has positioned itself as a beverage that holds its own for all special occasions.
Among other conditions of the merger agreement, CCBSA’s cooler compliance has been fully audited, the company has held a Supplier Development Conference as agreed and retained staffing levels at the levels as at the time of the merger, regardless of restructuring.
CCBSA has also made very good progress on its SMME Investment and Agricultural Fund.
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