Glass-bottle manufacturer iSanti Glass, which was spun out of Nampak four years ago, plans to build a R3bn furnace in the next two years as demand for bottles rises.
The facility, which may create 120 jobs, is part of an agreement reached with competition authorities when the sale of the business by Nampak to black-owned company Kwande Capital and South African Breweries (SAB) for about R1.5bn was approved in 2020. The latter produces Flying Fish, Brutal Fruit and Castle Lager, among other brands.
Shakes Matiwaza, iSanti Glass chair, said this week: “We are still keen to build a fourth furnace and given the limited space here [at the iSanti factory in Roodekop, Germiston], we will build somewhere else in Gauteng,”
He said the initial plan was to have the factory running by the end of next year, but that has been postponed to 2025 because of Covid-related delays.
In May, iSanti completed the refurbishment of an existing furnace for R500m. The factory produces 250,000t of bottles, up to 90% of them for to the alcohol industry, including SAB, Heineken and Halewood, whose brands include Belgravia Gin and Red Square Vodka. Other customers include Tiger Brands and Pioneer.
Matiwaza said 50% of the company’s products are recycled, “making us an environmentally conscious manufacturer [that contributes] to environment sustainability”.
Working alongside SAB, we have been able to build and transform iSanti Glass. To achieve growth, partnerships are essential.
— Shakes Matiwaza, iSanti Glass chair
As there is a shortage of glass, the case for a new plant is compelling. Globally, production of glass containers was hit by Covid-related restrictions. Furnaces did not run at full capacity and some companies postponed investment in manufacturing facilities.
Matiwaza said in South Africa, supply has never met demand, hence some businesses import glass to supplement local output.
Like many businesses affected by electricity shortages, iSanti has spent R100m on generators to keep its factory running during load-shedding. It spends about R5m-R10m a month on diesel. Matiwaza said blackouts have increased operating costs for the business and the company is investigating solar options.
iSanti, which has 470 employees, is 60% owned by Kwande Capital, co-founded by Matiwaza. SAB holds 35%, while iSanti employees own 5%.
This week, iSanti and SAB held an event to mark their three-year partnership. Matiwaza said iSanti is the first majority black-owned glass container manufacturer in South Africa. He added that working alongside SAB, “we have been able to build and transform iSanti Glass. To achieve growth, partnerships are essential.” SAB is iSanti's biggest client.
Speaking at the event, deputy minister of trade, industry & competition Fikile Majola said: “We believe that by promoting black industrialisation we are changing economic fortunes in the country, something that is very important to us. The iSanti Glass initiative is a strong example of a successful partnership that provides black-owned entities access to markets around the country.”
SAB CEO Richard Rivett-Carnac said the journey with iSanti began four years ago when the industry was in decline. “Collaborating with Kwande Capital and being able to turn around the business has been especially rewarding. Today, our value chain stands stronger and is more productive, thanks to their ongoing commitment.”
He said driving transformation is critical for SAB and “we see it as an opportunity to strengthen our supply chain and create a more sustainable and inclusive future”.
Rivett-Carnac said localisation is equally important and “our intention is to continue partnering with black industrialists and local SMMEs in our value chain to accelerate growth and transformation in the communities in which we operate”.
At April's South Africa Investment Conference, SAB announced a R5.8bn investment in the country. It said R2.4bn will be allocated to new developments, including a R555m expansion of the Ibhayi Brewery, while R3.4bn will be used to sustain SAB’s operations and infrastructure. The brewery is expected to create another 14,000 jobs throughout the value chain.
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