Varun Beverages to bolster South African subsidiary with US$48.2M investment

SOUTH AFRICA – Varun Beverages Limited (VBL), the bottling partner for PepsiCo in several global markets, has announced a US$48.2 million investment in its South African subsidiary, The Beverage Company Proprietary Limited (Bevco). 

This move is aimed at strengthening Bevco’s financial resilience and supporting its expansion efforts across the region.

Bevco, which operates as the PepsiCo bottler for South Africa, Lesotho, and Eswatini, also holds distribution rights for Botswana and Namibia. 

Varun Beverages acquired Bevco in December 2023 for US$154.1 million. As part of the latest investment, VBL will increase its shareholding in the subsidiary by an incremental 2.42%.

Expanding African operations

The South African investment is the latest in a series of strategic moves by VBL to deepen its footprint in Africa. 

In December 2024, the company commissioned two production lines in Zimbabwe to increase the output of carbonated soft drinks and its bottled water brand, Aquaclear. The lines boast capacities of 340 and 400 bottles per minute, respectively.

Earlier in 2024, VBL allocated US$7 million to produce the PepsiCo snack brand Simba Munchiez in Zimbabwe and Zambia, further diversifying its portfolio in the region. 

Additionally, a US$50 million investment in a new Pepsi production facility in Kiswishi City, Democratic Republic of the Congo, marked another milestone in the company’s African expansion.

VBL’s aggressive growth strategy has seen it acquire SBC Beverages Tanzania Ltd. (SBCT) and SBC Beverages Ghana Ltd. (SBCG) for US$154.5M and US$15M, respectively. 

In the Democratic Republic of the Congo, VBL’s newly built production plant spans 15 hectares in the Kiswishi City Special Economic Zone. This facility supports Pepsi production for Lubumbashi, Haut-Katanga Province, and neighboring regions.

Robust financial performance

VBL’s efforts in Africa have significantly contributed to its strong financial performance. In the third quarter of 2024, the company reported a 24% year-on-year increase in net profit to US$73.8M, driven by surging demand in international markets. 

Total sales volume grew by 22% to 267.5 million cases, with revenue from operations rising 25% to US$594.7 million.

The contributions of Bevco, alongside VBL’s expanded operations in Zimbabwe, Tanzania, Ghana, and the DRC, have played a pivotal role in this growth trajectory.