All packed up but nowhere to go

Finweek English Edition - - Companies & Markets -

PACKAGING COM­PA­NIES may not be the eco­nomic lead­ing in­di­ca­tors they once were. The en­tire en­vi­ron­ment is cur­rently ab­nor­mal. But the packaging groups – largely rep­re­sented on the JSE by Nam­pak and As­tra­pak – are prob­a­bly still the best lead­ing in­di­ca­tors we have. Re­cent per­for­mance and fi­nan­cial re­sults seem to in­di­cate a re­cov­ery in re­tail and con­sumer spending is still a long way off.

Nam­pak re­leased in­terim re­sults just over a week ago. Vol­umes in its main mar­ket – South Africa – were steady but flat, with a drop off in the sec­ond quar­ter. Looking for­ward, new CEO An­drew Mar­shall said cur­rent “dif­fi­cult eco­nomic con­di­tions” were ex­pected to con­tinue in all Nam­pak’s mar­kets. As a broad-based sup­plier of packaging in metal, glass, plas­tic and pa­per, Nam­pak’s clients come from vir­tu­ally ev­ery in­dus­try that uses packaging.

As­tra­pak is more fo­cused on plas­tic packaging. But its clients also range across all the con­sumer sec­tors, en­com­pass­ing food, bev­er­ages, per­sonal care, phar­ma­ceu­ti­cals, agri­cul­ture, in­dus­trial and re­tail mar­kets. Its view for the fu­ture – in full-year re­sults to end-Fe­bru­ary – is that “dif­fi­cult trad­ing con­di­tions are ex­pected to re­main un­til at least the sec­ond half of the 2009 cal­en­dar year”.

That sounds a lit­tle more en­cour­ag­ing but still in­di­cates both com­pa­nies see no clear signs of re­cov­ery soon.

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