Mpact, the largest paper and plastics packaging and recycling business in southern Africa, has made a strategic investment in Africa Tanks, one of South Africa’s leading water tank manufacturers. This acquisition is set to provide Africa Tanks with the necessary capital to achieve economies of scale and expand its reach into the Eastern and Western Cape, thus establishing itself as a national supplier.
Bruce Strong, CEO of Mpact, articulated the rationale behind the investment, emphasizing the pressing need for reliable water supply solutions in South Africa. He stated, “We aim to invest in growth markets that meet vital needs. South Africa is a very dry country with inadequate water infrastructure. People in many cities, towns, and regions face ongoing water supply challenges. Just as loadshedding drove the rapid adoption of electricity self-generation, we foresee a large and rapidly growing market for high-quality water tanks as households and institutions invest in water security to ensure continuity of supply. We are excited to be investing in Africa Tanks, which utilises state-of-the-art extrusion blow-moulding technology to efficiently manufacture tanks of market-leading quality and design.”
Africa Tanks stands out in the market as the only water tank manufacturer in South Africa employing three-layer ‘blow moulding’ technology, which is both cost-efficient and provides superior strength compared to the traditional ‘roto moulding’ technology used by other producers. This innovative technology results in the strongest tanks available, backed by a 10-year warranty.
Craig Forbes, Director of Africa Tanks, highlighted the critical need for reliable water storage amidst the country's water supply challenges. He commented, “Water supply is increasingly uncertain due to a combination of factors - deteriorating infrastructure, environmental degradation, persistent droughts and disparities in water and sanitation access. Given these dire circumstances, the need for reliable water storage that adheres to strict safety and hygiene standards is paramount. This is where Africa Tanks steps in, transforming lives and livelihoods with a product that combines quality and affordability. We are delighted to have Mpact as an equity partner in Africa Tanks as it gives us the necessary capital to expand the business as well as the opportunity to leverage Mpact’s technology, expertise and national footprint as a leading plastic container supplier. With Mpact as a shareholder, Africa Tanks will continue to grow from strength to strength, addressing the urgent need for safe and reliable water storage solutions across southern Africa.”
South Africa faces significant water scarcity challenges, with an average annual rainfall of just 465mm. While many households have access to piped water, the percentage of households experiencing prolonged water interruptions has risen from 24.3% in 2012 to 35.8% in 2023. Furthermore, numerous households in areas lacking piped water depend on periodic water deliveries via tankers. Recent years have seen increasing water shortages linked to the power crisis, adverse weather events, and a decline in water quality due to contamination, as evidenced by the Green and Blue Drop reports.
Strong underscored Mpact's commitment to addressing these challenges through strategic investments. He remarked, “Access to clean and reliable water supply is a basic human right as well as a necessary business requirement. Mpact’s vision is to build a sustainable business which also contributes to society through innovation and investments in businesses that respond to society’s needs. Our investment in Africa Tanks is one such example and aligns with our strategy to pivot towards a circular economy while investing in areas where significant opportunities for growth and innovation exist.”
According to Statistics South Africa, the country's population grew by 19.8% between 2011 and 2022, from 51.7 million to 62 million, marking the largest percentage increase since 1996. This population growth, coupled with persistent infrastructure and water supply challenges, suggests a continued and growing demand for water storage and rainwater harvesting solutions.
Strong concluded, “The broader infrastructure and related water supply challenges are likely to persist for several years to come and demand for water storage and rainwater harvesting is expected to continue growing.”
