Glass maker Consol, which shelved a R1.5bn investment in a new factory in 2020 as a result of a ban on the sale of alcohol, is reviewing the decision after production and the sale of glass bottles returned to levels seen before the Covid-19 pandemic.
CEO Mike Arnold said the company was revisiting the investment to meet anticipated demand.
“This is based on normalisation of glass bottle market demand towards the end of last year and continuing into this year as well as a more positive outlook from our customers on consumer spending,” Arnold told Business Day in an e-mailed response to questions.
His comments on Tuesday came as the government avoided the reimposition of the controversial ban on the sale of liquor. A ban was recommended by its scientific advisers to protect the health-care system from being overwhelmed with hospital trauma admissions.
The two bans in 2020 on the sale of alcohol caused the glass packing industry R1bn in lost production and supply, according to Arnold.
“As we again experience an increase in Covid-19 infections, we would support temporary measures which limit social interactions and ensure our hospitals have enough capacity. As the past has shown, however, we don’t think total alcohol bans are necessary to limit the spread of infections,” Arnold said.
Consol joins SA Breweries (SAB) in reviewing capital expenditure plans for SA, signalling the thawing of relations between the key role players in the alcohol value chain and the government. SAB, the domestic unit of brewing giant AB InBev, said last week it will invest R2bn to revamp its facilities.
In 2020, SAB canned R5bn in capital expenditure due to the previous bans, which cost the industry R36.3bn in lost revenue, according to the SA Liquor Brand Owners Association.
In another sign of growing confidence in the economic outlook, packaging group Mpact said on Tuesday it had earmarked R500m in new investment to expand capacity to meet growing customer demand for environmentally friendly packaging. Mpact is recovering from the slump in economic activity, which led to reduced demand for its packaging products.
Nampak, which supplies beverage cans for beer and soft drinks, cartons for traditional beer and caps for wine bottles, said its volumes were yet to recover to pre-Covid levels. This was because of restrictions on large social gatherings and weekly sports events at which people consume a variety of beverages in cans and cartons.
“The overall impact of Covid-19 last year resulted in Nampak losing around a third of our annual volumes within six months when the market for beverage cans almost came to a standstill due to lockdown restrictions in SA. In Bevcan SA, we have not recovered to pre-pandemic seasonal levels as yet,” Nampak CEO Erik Smuts said.
He said stricter curfews were more effective than an outright ban on alcohol sales.
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