PROCTER & Gamble (P&G) is to invest about R1.6bn in South Africa to build a multi-category manufacturing plant for both the local and export markets.
The company’s brands include Head & Shoulders shampoo, Pampers nappies and Gillette shaving products.
"We aim to make South Africa P&G’s manufacturing hub for the markets of Southern and East Africa," Dimitri Panayotopoulos, the company’s vice-chairman in charge of global business units, said at a press conference held jointly with the Department of Trade and Industry on Friday.
Global brands are progressively looking to emerging markets and Africa presents a compelling investment case for retailers.
The Economist Intelligence Unit predicts that by 2030‚ Africa’s top 18 cities could have a combined spending power of $1.3-trillion.
One of the main driving forces behind Africa’s growth spurt is the accelerating pace of urbanisation and consumer spending growth.
Construction of the new plant, which will be one of the largest P&G facilities in Europe, the Middle East and Africa, is expected to start in 2014, with production expected to commence in 2016 or early 2017. A location for the plant has yet to be finalised.
In 2009, the company invested R500m in a manufacturing plant for Pampers nappies in Kempton Park, Johannesburg. Together with creating jobs, the Pampers plant attracted a further R6.6m in investment from suppliers.
"Our global strategy is to maintain our strong momentum in developing markets. Africa in general and South Africa in particular — as the largest African economy — are thus of key importance to us," Mr Panayotopoulos said.
Trade and Industry Minister Rob Davies welcomed the announcement as "a further example of confidence by leading manufactures in the future of South Africa".
"The investment expansion announced today is expected to create over 500 additional jobs at P&G," the consumer goods company said.
Sasol, primarily through its operations in Europe and North America, has been one of P&G’s principal suppliers for over five decades. CEO David Constable said that for the past 10 years, the two companies had strengthened their strategic partnership and were increasing their commercial and technical collaboration efforts.
"Sasol is delighted that P&G is looking to expand its presence in South Africa. We believe that, together, we can contribute positively to the downstream manufacturing sector of the South African economy," MR Constable said.