Blacks invest $15 million in Pepsi venture: South African firm will be black-owned and black-managed.

South African firm will be black-owned and black-managed

A group of prominent African-American investors has raised $15 million for a bottling company in South Africa that will spearhead Pepsi's reentry into that market.

Pepsi plans to invest $100 million in South Africa during the next three years, hoping to regain a share of what is one of the top 20 soft-drink markets. Pepsi made the announcement during Nelson Mandela's recent visit to the United States.

The black-owned and black-managed company will be called New Age Beverages. Khehla S. Mthembu, a South African former political prisoner who spent three years in prison with Nelson Mandela, will chair the firm.

Pepsi invested $5 million in the $20 million venture. The other $15 million was invested by Egoli Beverages, L.P., a group of black investors that includes Earl G. Graves, publisher of BE and chairman of the Pepsi-Cola Bottling Co. of Washington, D.C.

Investors in the diverse Egoli group include the Savant Group, a black-owned investment firm based in Santa Monica, Calif.; Calvin Grigsby of Grigsby, Brandford & Co.; NBA superstar Shaquille O'Neal; Pryor, McClendon, Counts & Co.; Clarence Avant and Jheryl Busby of Motown Record Co.; New Vista Partners, which includes Malcolm Pryor; actor Danny Glover; prominent defense attorney Johnnie Cochran Jr.; Hampton University; and Inner City Broadcasting Chairman Percy Sutton.

When Graves called Grigsby to tell him about the investment opportunity, Grigsby responded with enthusiasm. Ironically, he used to picket firms that did business with South Africa's former government. Now, Grigsby says, the responsibility that black Americans have to their brothers and sisters in South Africa goes beyond picket lines.

Glover echoed Grigsby's comments, saying that the Mandela government desperately needs foreign investment. "This is an enormous opportunity for me because my major was economics," joked Glover, who portrayed the legendary leader in the 1987 film Mandela. On a more serious note Glover added, "It is important that our voice be heard ... [and] that we put our money where our mouth is."

Mthembu said the company will focus on selling in black townships instead of the established urban centers. Coca-Cola is believed to have a 75% share of the South African softdrink market, estimated to be near $1 billion. Pepsi divested its South African interests in 1985 in response to international sanctions against apartheid.

New Age will be based in Johannesburg and will employ 200 people. It will distribute several products, including Pepsi, Diet Pepsi and Seven-Up. Company officials say South Africans will own a majority stake in the new company within five years. Pepsi officials declined to discuss individual amounts invested by Egoli members or expected returns on their investment. Mthembu said New Age will also help establish black South Africans in other businesses, such as trucking companies and contracting. It was scheduled to begin operations in November.

Other Egoli investors are Luther Ragin Jr., CFO of Earl Graves Ltd.; the Rev. Suzan D. Johnson of Mariner's Temple Baptist Church in New York; the Rev. Franklyn Richardson of Grace Baptist Church in Mount Vernon, N.Y.; and New York's Hale House.

"Today marks a new age," Mthembu says.