Coca-Cola pours $54m into plant


[Image] The new bottling plant will bring
benefits for the community and the
(Image: Fir0002/Flagstaffotos)

• Pat Dambe-Hansen
Coca-Cola director, communications
+27 11 644 0780

Janine Erasmus

The South African operation of Coca-Cola is to invest US$54-million (R400-million) into a new bottling plant for its Valpré brand of mineral water. The plant will be built in Heidelberg, 42km south of Johannesburg.

Valpré spring water is currently bottled in Polokwane, Limpopo province. The brand’s biggest markets are in the Gauteng and Western Cape provinces.

The announcement came in mid-October 2009. Speaking at the event, Coca-Cola South Africa president Bill Egbe said the investment would ensure the continuity of supply and demand for the company’s brands, and help reduce its carbon footprint through shorter transportation distances.

Coca-Cola made its debut on the Dow Jones Sustainability Index in 2009 and is committed to sustainable practices in the environments and communities in which it operates.

The company spent three years looking for the ideal place to build a second Valpré bottling plant and decided on Heidelberg because the land’s geology and chemical properties of its underground water are similar to those of Polokwane.

Furthermore, the site is close enough to the target market to make a substantial difference in transport-related carbon emissions.

The plant, a joint venture between Coca-Cola South Africa and Coca-Cola Shanduka, is expected to be ready by September 2010. In 2007 Shanduka, a black-owned investment company, bought a 70% shareholding in Scarlet Ibis Investment 3, one of Coca-Cola’s four local bottlers. The parent company retains a stake, but all operations are now managed by the major shareholder.

Building communities

The new Valpré plant is expected to create about 300 jobs in Heidelberg. In addition to its environmental commitment, Coca-Cola South Africa strives for the economic development of communities in South Africa.

“We believe projects such as the bottling plant will assist government to reach its unemployment alleviation targets and as such we’re proud to be part of that movement for change,” said Egbe.

Heidelberg lies in the Lesedi local municipality. Speaking at the ceremony, Lesedi executive mayor Busisiwe Modisakeng said the new plant would not only help to fight poverty, but would put the municipality on the bottled water map.

She assured the community that there would be no water shortages as a result of the plant, and that systems would be put into place to ensure that the whole community benefits from the project.

“We have to be involved in the communities we operate in,” added Egbe.

He promised those present that no graves would be tampered with during construction. The plant is to stand on a 500ha plot which consists of two idle farms joined together. The company will also make sure that the few remaining residents on the farms are looked after.

According to Coca-Cola, the water in the area will last for a few hundred years, as long as there is rain – but the company has conducted a thorough assessment of the valuable resource and has pledged to use only 6% of that annual rainfall.

Responsible business practice

The plant itself, which will require just over $13.4-million (R100-million) to complete, will include a cutting-edge filling and packaging section that will enable the bottles to be manufactured, filled and sealed in a single continuous process. At no stage will they leave the production line or be handled manually, which eliminates any risk of contamination.

According to project manager Casper Durandt, this is a first for South Africa, placing the plant on the same level as other world-class facilities. Its initial bottling capacity is 50-million litres per year. This will gradually increase to 150-million litres as the plant comes fully online.

But not all the investment will be spent on the plant. The rest of the funds will be used to build infrastructure and equip buildings with the latest environment-efficient systems, as well as to rehabilitate open land to original Highveld grassland. The company will draw water from the ground using solar power, and an on-site recycling centre is also being planned.

The Gauteng Department of Agriculture and Rural Development will keep an eye on operations, ensuring that Coca-Cola complies with legal requirements and standards.

Global brands

Valpré bottled spring water is available in South Africa in still and sparkling varieties. The company also produces Bonaqua, a range of prepared water products. With these two products Coca-Cola is believed to hold about 60% of the bottled water market in South Africa.

Other Coca-Cola brands available locally include the Bibo range of fruit punches, Minute Maid juices, the Appletiser and Powerade ranges, Nestea ready-to-drink products, Sparletta carbonated drinks and a number of licensed brands such as Schweppes.

Coca-Cola has been active in South Africa since 1928 when the first bottling plant and distribution centre were opened in Johannesburg. South Africa is Coca-Cola’s top market on the continent, and according to the company, consistently ranks among the top 10 performers within the group.

The local branch is part of the Eurasia and Africa group, with the Africa group office based in Johannesburg.