Ardagh Glass Packaging (AGP) South Africa, formerly known as Consol Glass, says it will create 300 jobs once it completes its third furnace in Nigel, east of Johannesburg, to cater for buoyant demand.
But supply shortages during the pandemic and cost considerations have prompted some food and beverage manufacturers to opt for alternative packaging.
The group has invested R3bn in an additional two furnaces to expand its plant in Nigel, with the first of the two opening in August.
Consol Glass was bought by Luxembourg-based metal and glass packaging Ardagh Group earlier this year.
The country’s biggest glassmaker was hit over the past two years by lockdowns and the ban on alcohol sales, forcing it to cut production. This resulted in a shortage of glass when the restrictions were lifted.
Companies such as Distell turned to cans for some products previously only offered in bottles.
Dale Carolin, AGP South Africa marketing and commercial executive, said the extra capacity “is helping to rebalance supply and demand” and “mitigate the need for imports”.
The furnace will add an extra 30% capacity to the Nigel facility, “making the plant the largest glass-container production facility in the AGP Africa network and on the African continent”, he said.
The second phase of the expansion will “further increase overall supply in the South African market and effectively eliminate expensive glass imports”.
He said the business is “already operating well ahead of pre-Covid levels, driven by strong beverage demand”.
South African Breweries (SAB) CEO Richard Rivett-Carnac said last month the market for glass was still “quite tight”, with the group having to import some glass, but supply was improving.
Some companies are looking at alternatives to glass packaging because of the shortages and also to lower the price for cash-strapped consumers
The alcohol industry is AGP's biggest customer, while the company also serves a range of businesses in the food, pharmaceutical and nonalcoholic beverage categories.
Carolin said the group would evaluate new opportunities for gaining market share from other packaging options such as hard plastic bottles and cans.
Some companies are looking at alternatives to glass packaging because of the shortages and also to lower the price for cash-strapped consumers.
Tiger Brands CFO Deepa Sita said the glass shortage “is still an issue but we are working very closely with our vendors to ensure that we have sustainable supply coming through”. She said one glassmaker had “issues at its plant and that has hampered production and put a strain on many companies”.
“Fortunately our plants have not come to a standstill because of supply issues.”
Sita said Tiger Brands was looking at alternative packaging such as firm polyethylene terephthalate (PET) plastic bottles.
CEO Noel Doyle said last week the company could switch to plastic packaging for items such as peanut butter and mayonnaise to “make our products cheaper”.
Sita said: “Glass comes with that premium feel but the technology and innovation in the PET space ... is quite impressive. We are looking at the comparison. In some of the baby products we have put the two together and PET is actually looking better.”
Nampak said this week it had developed, and was about to launch, new lightweight PET bottles that would reduce the impact on the environment.
PET is considered to be a relatively environment-friendly plastic as it is recyclable and uses less energy to produce.
Euromonitor Passport Data reported that 4.5-million units of glass packaging for alcoholic drinks, hot drinks and soft drinks were sold in South Africa in 2021, against 5.05-million of rigid plastic.
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