105-year-old South African company building the largest factory of its kind in the Southern Hemisphere

Tiger Brands is currently building a state-of-the-art “super bakery” on the East Rand of Gauteng, which will be the largest facility of its kind in the Southern Hemisphere. 

This is part of the company’s broader consolidation of small, splintered sites into centralised “mega sites” to leverage economies of scale. 

The economies of scale do not only exist in manufacturing, but throughout the supply chain and distribution channels.

While a super bakery may consolidate multiple manufacturing sites, it also centralises procurement and distribution. 

This results in a more efficient supply of raw materials, which are able to be delivered at scale to one location, and distribution to wholesalers or retailers can be sent from a single facility. 

At Tiger Brands’ interim results for its 2026 financial year, CFO Thushen Govender explained the benefits of the super bakery and how the company will leverage its scale in future. 

Govender explained that the company, founded over 100 years ago, is now looking to consolidate its facilities across the country into larger mega sites. 

For example, after the sale of Beacon, Tiger Brands will be able to merge three sites in Durban into a single facility, with a similar process occurring at its Paarl mega site. 

CEO Tjaart Kruger described this as changing the parts of the aeroplane while it is in the air, with it requiring significant investment and time to get right. 

However, if the company does get it right, the efficiency brought about by the economies of scale will see capital efficiency continue to rise. 

Kruger has implemented a deliberate strategy of minimising price hikes to ensure Tiger Brands’ products remain affordable across all income segments. 

In the short term, this translates into slower revenue growth, but rising volume growth and the taking back of lost market share in competitive areas. 

Kruger explained that Tiger Brands is in a unique situation where it brands are consumed across the spectrum of income levels. 

In the past, this has combined with the strength of the company’s brands to create the impression that Tiger Brands has endless pricing power. 

Kruger is clear in his objective to ensure that the company does not fall into this trap again, with efforts to make processes more efficient helping it keep its key product lines affordable. 

The super bakery

The super bakery being built in the east of Johannesburg is the flagship project of Tiger Brands’ manufacturing consolidation process. 

It symbolises what the company hopes to achieve across its other efficiency-improving projects, such as the Paarl mega site and future factories.

Through the Albany brand, which was created in 1970, Tiger Brands has created one of the largest baking operations in the world.

In its latest interim results, the company revealed that it expects the super bakery to be completed before the end of 2026. 

As of 1 June, the equipment containers for the facility were in transit and are expected to arrive in the coming months for the buildout. 

The advantage of building an entirely new facility is that it can be reorganised to improve efficiency across the entire production chain. 

It is not merely enhancing the productivity of an existing bakery, but rather reorganising a bakery to be centred around leveraging scale. 

Tiger Brands aims to be the lowest-cost producer of bread in South Africa after its investment in the new super bakery. 

The super bakery will replace five to six older, less efficient inland bakeries, with it estimated to reduce conversion costs by 50% and eliminate R250 million in overhead expenses annually. 

It is estimated that the super baker will produce 12,000 loaves of bread an hour when it is completed and operating at full capacity. 

The super bakery shows that the company is firmly on the front foot again, with it investing for savings and growth, not merely cost-cutting as it once was. 

Part of this includes investment in product innovation, with it particularly looking at driving growth in the breakfast segment under the Jungle brand and continued snackification. 

This includes the launch of a new porridge under the Jungle brand, which is coming in the near future. 

Tiger Brands has also effectively relaunched its Ingrams personal care brand to increase its penetration of functional creams. 

It remains dominant across its focus brands, with all besides Energade, Black Cat, and Ingrams having the top spot with regard to volume and value share in their segments.