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UPDATE 1-South Africa's Distell starts producing canned drinks in Angola
February 23, 2017 / 2:53 PM / in 9 months

UPDATE 1-South Africa's Distell starts producing canned drinks in Angola

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JOHANNESBURG, Feb 23 (Reuters) - South African drinks company Distell, which makes Savanna cider and cream liqueur Amarula, has started producing canned drinks in Angola, the company’s chief executive said on Thursday.

Angola is Distell’s largest export market in Africa but sales have fallen sharply there as a decline in oil revenues and lower economic growth have limited the availability of foreign exchange and hit Angolan consumers.

“We’ve just started up local production of cans in Angola and that investment will be followed up by bottle production before the calendar year is out,” Chief Executive Richard Rushton told Reuters in an interview.

Distell spent about $20 million to build the plant, which will produce about 10 million litres a year initially. The company plans to use cashflow from sales in the local kwanza currency to expand production to bottled drinks and gradually replace more and more of its exports to Angola.

The company, which makes wine, brandy, cider and ready-to-drink (RTD) alcoholic drinks, had previously only served Angola with beverages exported from South Africa.

“At one point we had more than 200 million litres of volume of our RTDs in the country and we are down to a third of volume or even lower,” said Rushton, adding that a dearth of foreign exchange, import curbs and rising taxes worsened the decline.

Distell hopes to build its exports to Angola back up to 200 million litres and then increase the volume of sales there through local manufacturing.

The company reported headline earnings per share of 535.9 cents for the half-year to end-December on Thursday, up 1.2 percent on a year earlier.

Headline earnings per share is the main profit measure in South Africa and strips out certain one-off items. (Reporting by TJ Strydom; editing by James Macharia and David Clarke)

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