Exploratory Essay on Capital Investment

I have gained a lot of insights both personally and financially in the last few weeks. In this short time, I have attained a better  understanding of financial management in businesses, the various sources of funding available and now capital investment appraisal.

For the purpose of this assignment, I would like to reflect on the topic of capital investment. Susan Ward (2021) explains that capital investment refers to the purchase of a business's fixed assets such as land, machinery, or buildings. Cash, assets, or loans can be used for capital investment. Additionally, it has been reported that businesses may struggle to survive if they do not invest capital.

The recent announcement of the Health Promotion Levy or tax on sugar sweetened beverages,makes this topic very relevant to me.  The national treasury has confirmed that the health promotion levy for beverages with more than 4 grams of sugar per 100ml will increase from 2.21c/g to 2.31c/g from 1 April 2022. It said further consultations will be conducted to determine if the 4g threshold can be lowered and if the levy should extend to fruit juices.

Despite my role in the Public Affairs, Communications, and Sustainability department of a beverage company, it's critical that I participate in forums and working groups to assist the business in making key decisions. This includes capital investments in  our product range and investing in initiatives that ensure long term growth and relevance for the company.  We could look to launch additional healthier products that fall below the threshold in the form of additional No Sugar variants. This could result in additional production lines in order to meet demand. Investing in  assets such as stadiums will also  generate additional revenue for the business and demonstrate our alignment with the government to foster healthier environments. Lastly, consideration needs to be made for investments in greater fleet and technological devices for the Sales Team, so that we ensure frequent engagement with our audiences and keep them informed of how we will continue to pivot to meet customer demand and keep the business operational.