Nampak in Africa
R500m beverage can plant planned for Angola
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