Nam­pak in Africa

R500m bev­er­age can plant planned for An­gola

Finweek English Edition - - Companies & markets - GUGU­LAKHE MASANGO

PACK­AG­ING GROUP NAM­PAK is step­ping up its in­vest­ments in An­gola and Nige­ria to in­ten­sify its African growth strat­egy while man­age­ment as­sesses de­vel­op­ments in its Euro­pean op­er­a­tions.

Neil Cum­ming, Nam­pak Africa MD, says: “On the draw­ing board is a pos­si­ble in­vest­ment in a bev­er­age can plant in An­gola. It could cost us be­tween R300m and R500m to build.”

The com­pany in­tends us­ing its Nige­rian op­er­a­tion to in­crease its pen­e­tra­tion in other Ecowas states. “We want to make prod­ucts in Nige­ria be­sides fold­ing car­tons (and metal cans),” says Cum­ming.

Nam­pak, the largest sup­plier of plas­tic bot­tles to the dairy in­dus­try in the UK, with 67% of the mar­ket, has com­pleted the re­struc­tur­ing of its Euro­pean op­er­a­tion. In­ter­na­tion­ally, it’s been a tough time to op­er­ate a pack­ag­ing group, but Nam­pak is start­ing to ben­e­fit from the re­struc­tur­ing.

CE John Bor­tolan says: “The Euro­pean op­er­a­tion is op­er­at­ing sat­is­fac­to­rily, even though it hasn’t shown the best profit, and we have a stable man­age­ment struc­ture.”

In Africa (other than SA) it em­ploys more than 3 000 peo­ple and op­er­ates in 11 coun­tries, gen­er­at­ing more than R1bn in rev­enue. Th­ese coun­tries in­clude Kenya, Malawi, Nige­ria, Zam­bia and Zim­babwe. Some of the sub­Sa­ha­ran coun­tries are ex­pe­ri­enc­ing GDP growth of more than 5%.

Bor­tolan says that’s en­cour­ag­ing, and Nam­pak wants to be part of that growth.

“Gen­er­ally our in­vest­ments in the rest of Africa have been suc­cess­ful.”

Nam­pak has a mar­ket cap­i­tal­i­sa­tion of more than R14bn but de­spite en­cour­ag­ing growth in Africa, a num­ber of com­pa­nies in the group are be­ing re­assessed by the SA Rev­enue Ser­vice.

As a re­sult, Nam­pak has set aside more than R700m as a con­tin­gency but has lodged an ob­jec­tion and is await­ing Rev­enue’s re­sponse, which is ex­pected by end-March.

Step­ping up in­vest­ment in Africa is not go­ing to be easy, but Bor­tolan says the group has been en­cour­aged by Africa’s growth and the re­nais­sance tak­ing place. “We like what we see in the con­ti­nent so we’re eval­u­at­ing a num­ber of prospects.”

Nam­pak Africa cur­rently ex­ports about 400m bev­er­age cans from South Africa to An­gola, but Cum­ming says SA work­ers who have been pro­duc­ing th­ese cans shouldn’t be wor­ried about their jobs. “We’ve got growth po­ten­tial in this coun­try.”

Nam­pak, the largest pack­ag­ing group in Africa, has in­vested US$50m (R359m) in Nige­ria, gen­er­at­ing about R400m in turnover there.

“We’ve seen pretty good growth in Nige­ria and we will see more in­vest­ments there from time to time,” says Cum­ming.

The group is likely to de­rive growth from the Eco­nomic Com­mu­nity of West African States (Ecowas), which in­cludes Benin, Ghana, Mali, Sene­gal and Sierra Leone. Ecowas’s main aim is to boost eco­nomic in­te­gra­tion and shared de­vel­op­ment in the 15 West African na­tions.

Re­nais­sance men. Neil Cum­ming (top) and John Bor­tolan

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