16/10/2019
Black Lite Consulting is proud to have been a strategic and trusted BEE advisor to on a R1.5bn deal for the creation of the first black industrialist glass manufacturer in SA. See announcement below.
TRANSFORMATION NEWS
SAB closer to reaching its milestone of creating the first majority Black-Owned glass manufacturer in SA
As a company dedicated to creating lasting legacies, SAB has adopted a multifaceted approach to implementing empowerment and enabling meaningful development of the non-transformed core sectors of SAB’s supply chain. The current glass container market is a non-transformed duopoly in SA, consisting of Consol (market share ~75%) and Nampak (market share~25%). To remedy this, SABSA Holdings Proprietary Limited (“SABSA”) in partnership with Kwande Capital Proprietary Limited (“Kwande”) has entered into a sale of business agreement with Nampak Products Limited to acquire its struggling glass division.
SABSA is the holding company of the South African Breweries Proprietary Limited and a wholly owned indirect subsidiary of Anheuser-Busch InBev SA/NV (“AB InBev”). AB InBev is one of the largest glass manufacturers globally operating glass furnaces in Mexico, The United States, Brazil and Paraguay. Kwande is a 100% Black Owned and 50% Black Women Owned investment holding company. The new company, called Isanti Glass, is controlled by Kwande with a 60% shareholding and SABSA has a 40% minority shareholding.
Transaction Facts
• First majority Black Owned glass manufacturer in South Africa (Black Ownership percentage is 60% and Black Women Ownership is 30%)
• Total number of employees approx. 450
• Total investment amount is c. R1.5bn, with a further CAPEX investment of R700m within 3 years
• Nampak produces approx. 200 tonnes of glass per annum (25% market share)
• The transaction is sponsored by AB InBev through the provision of the following:
(i) a Long Term Take-or-Pay Offtake Agreement and plant performance commitments were required to secure the funding for the transaction
(ii) in order to improve the plant efficiencies and the AB InBev Vertical Operations Team (VOPs) will provide technical support to upskill employees and management and ensure knowledge transfer
(iii) The VOPs team will, in addition, implement AB InBev tools and knowledge of operating a glass plant
The transaction will be submitted this month to the Competition Commission for approval. If approved, this landmark transaction will create the first majority Black Owned glass manufacturer in South Africa, in line with The DTI’s Black Industrialist Policy and will deliver on SAB’s commitment to Government to convert existing industrialised suppliers to Black Ownership.
