Gaia Fund Managers in South African water deal

Gaia has entered South Africa’s rapidly growing bottled water market.

Dr Hendrik Snyman, chief investment officer of Gaia Fund Managers

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Gaia Fund Managers has entered South Africa’s rapidly growing R6 billion (c. $316 million) a year bottled water market with a supplier of clean drinking water, as local governments are failing to provide its citizens with safe drinking water across the country.

Through a transaction with Oasis Water’s CEO Johan Buys, Gaia is now a majority co-shareholder in the company with its Doornkloof mega bottling plant and national footprint spanning more than 80 franchisees, 364 franchise outlets, 250 retail shops, 94 express stores, six depots and 14 factories, which offer sustainable bottled water, empty bottle refills and water-as-a-service subscription options.

“Oasis is considered a leading brand of purified water in South Africa and has proven their ability to capture this demand with the business having provided excellent results over the past years,” says Dr Hendrik Snyman, chief investment officer of Gaia Fund Managers.

The demand for safe and clean drinking water in South Africa is growing as the population increases. This demand has escalated as municipalities struggle to keep infrastructure in a working order. This is supported by the declining number of municipalities that received a ‘blue drop’ score last year as the incidences of harmful bacteria and other pathogens increased in households’ water supply.

“With South Africa’s unfortunate failing infrastructure, Gaia sees an immediate and growing demand for clean, safe and, importantly, environmentally friendly drinking water,” Snyman adds.

The Oasis investment affirms Gaia’s support of the Oasis business model, aimed at supplying South Africans with sustainable sources of safe drinking water. According to Snyman, the lack of access to safe and clean drinking water creates an opportunity for investors to gain access to the water market, an investment sector not readily accessible to investors.

Snyman continues, “Research has shown South Africans drink 11.37 litres of bottled water per capita and the average consumption in the top-10 bottled water markets is around 150 litres.

“South Africa’s current bottled water market alone is worth around R6 billion annually and we estimate it will grow by a compound 7% every year. This does not even take into account the refill and subscription water market for homes and offices.”

Gaia made its initial investment in Oasis Water back in 2022, when Oasis bought the Doornkloof water bottling plant. This investment has allowed Oasis to start serving South Africa’s large retailers with their house brand water as well as third-party wholesale distributors.

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