South Africa“s Consol Glass, the largest glass manufacturer on the continent, has announced plans to build a ZAR 400 million furnace in an expansion project that would provide an additional 15% capac…
South Africa“s Consol Glass, the largest glass manufacturer on the continent, has announced plans to build a ZAR 400 million furnace in an expansion project that would provide an additional 15% capacity, equivalent to 90,000 tons of glass, to meet booming consumer demand for glass containers. The investment will take Consol“s total annual production to more than 3 billion bottles, or 845,000 tons of glass. The South African container glass market is expected to reach 1 million tons a year over the next 12 months and will represent, by value, about 11% of the total packaging market. Consol group MD Mike Arnold said: “Despite the injection of approximately 25% new capacity, which will be completed by early July this year, SA“s demand for glass containers on the back of a growing economy and increasing consumer preference for glass packaging will in the short term exceed local manufacturing capacity”. South African Breweries recently announced it was running out of bottles because of “unusually” high demand for beer. The company said high demand, especially for brands in returnable bottles, had reduced the availability of 750ml quarts, forcing it to start importing 20,000 tons of glass a month to relieve the shortages. Spokeswoman Shirley Scriven said the higher demand for non-returnable bottles had resulted in glass shortages from major suppliers, and a temporary shortage of stocks in certain brands. The company would continue importing glass until the end of 2007. Zimbabwe faces the same problem. Soft-drink bottling company, Mutare Bottling, also announced it was facing a serious shortage of glass bottles, which has led to its production capacity falling to 30% in May 2007. The Consol Clayville fourth furnace, to be built in Midrand, Gauteng, is planned to be commissioned in April 2008. Mr. Arnold said a ZAR 410 million Consol Cape Town Bellville number one furnace rebuild and expansion project was scheduled for completion in early July 2007. “This investment, which will take 110 days to complete, will double the original furnace size and will increase the plant capacity by 40,000-60,000 tons a year to meet expected demand in the Eastern Cape and Western Cape regions”, said Arnold. These capacity expansions follow the recent commissioning in July 2006 of the third furnace at Consol Clayville, which also increased capacity by 90,000 tons. “This new Clayville investment will bring Consol“s total investment in capacity to ZAR 1 billion over a two-year period. “With our customers and consumers at the core of Consol“s purpose, ensuring that our customers“ glass packaging requirements are kept satisfied is a priority”. “Following the new Clayville investment, it“s expected that market requirements will be satisfied, ” said Mr. Arnold. Consol Ltd became Consol Glass in April 2007 after the successful take-over bid led by private equity firm Brait, changing Consol from a publicly listed to a privately owned company. Consol Holdings shareholders include Brait, Old Mutual, Sanlam, The Public Investment Corporation and private equity firms IV, HarbourVest and Capital International.