South African Breweries (SAB) will invest about ZAR700m ($78.9m) in a new maltings plant at Alrode in Gauteng Province to support the local economy.
The new maltings plant will be built next to the company's current Alrode brewery after the land ownership transfer that is anticipated to complete by middle of 2013.
Construction of the new plant is expected to be completed in 2015 and will produce 130,000tons of malted barley annually, which is expected to increase the use of local barley from 65% to between 90% and 95%.
SAB MD Mauricio Leyva said that the new maltings plant will allow the company to reduce its exposure to volatile international markets and replace a share of imported malt and barley with local barley.
"We have been looking at ways to locally source more of our agricultural raw materials, including barley, for some time, building on the work we have been doing with our Barley Breeding Program and with local farmers to develop competitive local barley varieties."
"Additional barley trials have been undertaken in the North West and more recently with emerging farmers in Limpopo," Leyva said.
The company's existing Alrode plant has production capacity of 40,000 tons per year and will be decommissioned after the new plant is fully operational.
Every year, SAB buys more than 1.8million tons of raw materials including barley, GMO-Free maize, hops, apples and grapes.
