Standard Bank unlocks USD 50m in funding for Coca-Cola Beverages Africa’s Ethiopia expansion
JOHANNESBURG, 28 January 2020: Standard Bank has successfully arranged and structured USD50 million in financing facilities for Coca-Cola Beverages Africa (CCBA) to support its expansion strategy in Ethiopia over the next five years.
The Coca-Cola Company holds a majority stake in CCBA, which is the largest bottler of Coca-Cola beverages in Africa – serving 13 countries on the continent – and eighth largest in the world by revenue.
Standard Bank, Africa’s largest bank by assets, “started its journey with CCBA a few years back and, as the relationship developed, has established itself as a primary banker to CCBA across key Africa geographies in which it operates. We have demonstrated the importance of our partnership with CCBA by offering unique solutions to key concerns, of which this transaction is a prime example,” says Simon Reeves, Standard Bank’s relationship manager for CCBA.
“This closely aligns with our key business imperative of driving sustainable growth across the continent,” says Stephen Lovell, Head, Corporate Financing Solutions, Africa Regions for Standard Bank. “Standard Bank’s position as sole funder to the deal demonstrates the bank’s ability to provide innovative financing solutions, leverage the strength of its balance sheet and Africa expertise to bring deals like this to life.”
With a presence in markets that match CCBA’s operations in Africa and having established a representative office in Addis Ababa in 2015, Standard Bank was able to provide insight into the local market that best supported CCBA’s growth ambitions in Ethiopia – a high growth region for Coca-Cola.
Ethiopia boasts the second-largest population on the African continent. While consumption of soft drinks is low compared to major markets, demand is expected to swell as the middle class rises and consumers are empowered with spend.
The bottling company, East Africa Bottling S.C, has already invested USD 70 million in a new plant that is set to become its largest in Ethiopia with a manufacturing capability of 70 000 cases per day.
Research by Fitch Solutions shows that the global soft drinks industry is worth USD 295 billion and is expected to grow to USD 377 billion by 2023. Africa only accounts for 3% of this total value, despite representing 16% of the global population, which is expected to rise 25% by 2050.
Mr Lovell adds that Standard Bank has invested heavily in the consumer sector with a specialised team that is capable of supporting multinationals like Coca-Cola to capitalise on the consumer opportunity.
“The CCBA deal holds significance as new FDI will be realised for Ethiopia, set to positively influence the country’s economic trajectory,” says Taitu Wondwosen, Head of Ethiopia for Standard Bank Group.
While Ethiopia’s economy continues to record strong economic growth, job creation through private sector reform remains a key imperative.
“CCBA’s expansion in the country complements the government’s plans. The new bottling capacity that is earmarked for the country will continue to add jobs to those that have already been created by CCBA in Ethiopia and are a vital part of our overall investment ambitions in Ethiopia,” says Daryl Wilson, Managing Director of CCBA Ethiopia. “This is a first for CCBA and Standard Bank, who understood our need and were able to find an innovative solution to solve it. The funding from Standard Bank is key to our growth ambitions in Ethiopia.”
Coca-Cola entered Ethiopia six decades ago and has since created about 2100 direct and more than 50,000 indirect jobs in the country.
“Standard Bank is committed to supporting our clients in accessing opportunities in Ethiopia, and more broadly across the continent,” says Ms Wondwosen. “Our support for CCBA’s vision of growing its bottling business responsibly across the continent demonstrates what we are doing to uphold this commitment and support our clients in Ethiopia”.