Consol Holdings Ltd is the largest glass manufacturer in Africa. And they have been battling reduced stock as climbing shipping rates and delays affect the supply chain. They are also struggling to increase local manufacturing with the resources they have available now. So South Africans denied legal alcohol sales during the Covid-19 pandemic, may now have to suffer shortages due to the supply-chain disruptions of glass bottle makers.
According to Consol’s Commercial Executive Dale Carolin, Consol has been supplying more bottles this December than it has in previous years. And demand has exceeded its ability to produce.
Manufacturing Expansion Suspended
Before the pandemic hit, Consol foresaw the need to ramp up manufacturing. And as a result, had plans in place to construct a 1.5 billion rand production plant in South Africa. But they suspended the project when lockdowns hit and the South African government prohibited alcohol sales.
To add to this, during the first and longest alcohol ban, Consol even warned that they may need to shut down glass furnaces completely. Since they cost around eight million rand per day to run. And cannot easily be switched on and off.
Then, even after the situation improved, Consol remained hesitant of carrying on with the expansion venture. Mainly due to their concerns over the government’s continued keenness on alcohol bans. Not an unreasonable concern when you consider that between March 2020 and August 2021, the government put a ban on alcohol sales four times. And to top it off, this was done without fixed time frames.
However, after the latest increase in demand, the glass company has decided to reinstate the expansion project. Although it will still take months to complete to the point that it can be adding to the supply chain. Meaning that it is likely South Africa will have to contend with the glass bottle shortage problem for the foreseeable future.
Shift to Premium Beverages
Consol also believes that part of the increase in demand for glass bottles is due to a shift towards premium purchases. As it appears that since the lockdowns many South Africans have moved to more premium beverage choices.
