Mpact invests in water storage; acquires equity stake in Africa Tanks

Mpact, the largest paper and plastics packaging and recycling business in southern Africa, has acquired a strategic equity shareholding in Africa Tanks, one of South Africa’s leading water tank manufacturers.

The investment will provide Africa Tanks with the capital required to achieve economies of scale and accelerate its growth into the Eastern and Western Cape, thus becoming a national supplier.

Announcing the investment, Bruce Strong, CEO of Mpact, 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.”

Craig Forbes, Director of Africa Tanks said, “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.”

Africa Tanks is the only water tank manufacturer in South Africa that manufactures tanks by way of three-layer ‘blow moulding’ technology, which is both a cost-efficient and superior strength technology compared to the traditional ‘roto moulding’ technology that other water tank producers utilise. The market for high-quality water tanks in South Africa is large and growing. Africa Tanks is unique in that the tanks are produced with an innovative three-layer design that means they are the strongest tanks and are sold with a 10-year warranty.

South Africa is a water scarce country with an average rainfall of 465mm. Albeit many households have access to piped water inside or outside their homes, the percentage of households that experienced water interruptions lasting more than two days at a time or 15 days in total over the past year, increased from 24.3% in 2012 to 35.8% in 2023. There are also many households in areas without access to piped water supply and who are reliant on periodic deliveries of water via tankers.

In recent years, there have been increasing water shortages linked to the power crisis or adverse weather events, but also as the Green and Blue Drop reports show, a decline in water quality due to contamination by sewage and bacteria in some parts of the country, leading to waterborne diseases.

According to Mpact’s Strong, “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 Stats SA, the South African population grew by 19.8% between 2011 and 2022 - from 51.7 million persons in 2011 to 62 million persons in 2022 - the largest percentage change in population size since 1996.

“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,” Strong concluded.