Watercom invests €100M in KHS beverage lines as Tanzania’s bottled beverage consumption booms
25 Oct 2022 --- Watercom is expanding its production capacity in Tanzania by adding two KHS lines for water, soft drinks and juice. The extension follows a boom in economic growth within the country.
Watercom has invested €100 million (US$99 million) in the new lines. The company believes it needs to add the lines to meet Tanzania’s rising demand for beverage bottlers. Currently, Tanzania has the highest bottled water consumption of any African country.
“The line performance has us convinced, as does the fact that our expectations regarding efficiency, optimum use of resources and waste management have been met,” says Salum Nahdi, director and CEO of Watercom, as to why it collaborated with KHS again on expanding to two additional lines.
Tanzania’s economic rise
Tanzania's economic system has experienced a growth rate of 5% to almost 8% since 2000, making the country one of the most dynamic markets in sub-Saharan Africa. A reason why the country has been considered politically and socially stable is a result of President Samia Suluhu Hassan’s policies.
Salum Nahdi, CEO of Watercom, speaks on the Tanzanian government looking to increase recyclability while PET bottle production rises. The population in the East African country is proliferating along with the middle classes, specifically in urban regions. The rise in the middle-class population has led to higher demands in the beverage industry, with more citizens able to afford the items.
This provides opportunities in the F&B industry, which has been expanding for a year now, according to Watercom. Several multinational companies are now starting to migrate their businesses into Tanzania.
Another primary reason why the water industry in Tanzania is booming is that the government is making an express policy to encourage people to drink clean bottled water to prevent health risks. No African country has as much packaged water consumed per capita as Tanzania, according to Watercom.
However, inland conglomerates benefit the most from the booming beverage industry, as they can significantly divide up the market between themselves. This is partly due to Tanzanian consumers being loyal to local products and brands they recognize. As a cause, it is harder for foreign businesses to create consumer loyalty and trust in the country.
Watercom’s growth
KHS previously collaborated with Watercom to create its original beverage line. Watercom claims its “use of up-to-the-minute high-tech from Europe is considered a unique selling point.”
“In the last two years, we’ve sold most of our machines in the East Africa sales region to Tanzania – both to big companies and smaller suppliers, more and more of whom are entering the market,” says Denise Schneider-Walimohamed, managing director of KHS East Africa.
Watercom, an Oilcom subsidiary, employs two new KHS lines to meet Tanzania market demands.
“PET lines are in high demand: plastic bottles are the most affordable for local consumers. As is usual in Tanzania, beverage producers want a high level of independence by not only manufacturing the containers themselves but also the preforms or caps.”
Now, Watercom operates three water lines and two lines for the safety and development of juice, which allows the company to claim to be one of Tanzania’s market leaders.
Watercom is a subsidiary of Oilcom. Oilcom has roots in Tanzania, based in the former capital of Dar es Salaam. It also has another subsidiary Milkcom, which works the entire value chain from cattle farming to bottling to selling finished dairy products in Tanzania since 2005.
The line’s process
The two new lines are much more energy efficient than past versions, reducing energy consumption and blowing air by up to 40%. The KHS sister lines stand side by side – with the practical added advantage that the blow molds for the various bottle formats can be easily swapped between one line and the other as the production plan dictates.
The Dortmund systems supplier installed the first water line and carbonated soft drinks for Watercom. This system allows up to 40,000 0.5-liter bottles to be filled in an hour. The Bottles & Shapes program also worked with Watercom on a distinctive bottle design for various formats that use less material and aim to boost brand image.
Tanzania’s bottled beverage market continues to grow as the country remains the highest consumer of bottled water. The Dortmund setup includes all components from the syrup room through a stretch blow molder/filler block and labeler to packers and palletizers. Palletizing is not a common practice in the African region as palletizing – if performed at all – is usually manual due to low personnel costs and more modest line outputs.
Another Watercom production site is planned for the neighboring state of Malawi, where KHS will contribute the third line.
Tanzania’s recycling
The recycling quota for plastic waste in Tanzania is 5%, and the value for PET is already at 20% – and growing. There currently is no deposit scheme in place, but there are lots of collection points for used PET bottles that pay collectors by weight.
What is collected is sent to be reused by local recycling companies or, as is more often the case, sold to exporters.
“The government is committed to various recycling projects together with the National Confederation of Tanzanian Industries and several private stakeholders. We now have a market for recycled PET here,” concludes Nahdi.
By Sabine Waldeck
