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Nampak is well positioned to contribute to Africa’s economy in the future
Article by Nampak 01 Oct 2012
At the end of last year, Forbes, one of the world’s leading business magazines, reported that African economies easily rank among the most resilient in the world. “In the middle of the 2009 global economic recession, Africa was the only region apart from Asia that grew positively, at about 2%. The continent’s growth has been on an upward trajectory ever since then – 4.5% in 2010 and 5.0% in 2011. And it will get even better in 2012. Africa is favourably positioned to become the fastest growing region in the world, and according to the International Monetary Fund (IMF), economic growth across the 54 countries of the continent will hover around 6% in 2012.”

The magazine added that there is also a significant boost in the spending power of Africans. “According to the African Development Bank, Africa’s fast-emerging middle class is now comprised of over 300 million people, and analysts from the McKinsey Global Institute estimate that general consumer spending across the continent will hover past the $1 trillion mark next year (i.e. 2012).”

As such, there is a huge and ever-growing opportunity for manufacturers and retailers of FMCGs like food, beverages, home care and personal care products. “But speed is critical,” said Forbes. “Investors who can quickly step in and get a grip on the market will be the dominant players in the years to come.” And that is where Nampak comes to the fore!

As Africa’s largest packaging company, Nampak is well positioned to contribute to Africa’s economy in the future. Today, the group has manufacturing operations in 13 African countries, including South Africa, as well as Angola, Botswana, Ethiopia, Kenya, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Zambia and Zimbabwe.

In South Africa, the company manufactures a very wide range of packaging products from metal, glass, paper and plastics. It is also a leading producer of toilet tissue and related products, such as disposable nappies, facial tissue, feminine hygiene products and incontinence products.

Moving forward, Nampak plans to grow with major customers and the overall economy. Having invested over R600 million in capital expenditure initiatives in 2011 alone, the company has a number of exciting plans in the pipeline, namely:

• New larger sleek beverage can
• Increased glass bottle capacity
• Print modernisation in DivFood
• Modernisation of food can ends
• Increased aluminium aerosol capacity
• New equipment for pouch making
• Increased two-ply toilet tissue capacity
• New equipment for wine closures

The corporate office is in Johannesburg, where the company has been listed on the Stock Exchange since 1969.

In the rest of Africa, Nampak is expanding and pursuing significant growth opportunities. Focus areas are:

• Capturing a larger share of the beverage can market in Angola
• A number of major opportunities in Nigeria
• Expanding the range of packaging products in a number of markets
• Building on the success of operations in Zambia
• Exporting Zambian manufactured liquid cartons to other African countries
• Increasing sack capacity in Kenya

To quantify the value of its businesses in the rest of Africa, Nampak says that they will account for 25% of total group revenue within the next five years. Currently, that figure is 8%. Here, the new beverage can making operation in Angola, which was commissioned in April 2011 at a cost of $152 million, will help grow turnover. Likewise, the carton board manufacturing facility in Nigeria and the “mini Nampak” model in Zambia are regarded as key strategic drivers in the future. Customers leading the way are SABMiller and Unilever among others.

At the same time, Nampak is the major supplier of plastic bottles to the dairy industry in the UK.

The company also has a world-class research and development facility in Cape Town, and is a leader in the collection and recycling of all types of used packaging.

In Nampak’s 2011 Annual Report, the company’s Chairman, Tito Mboweni, wrote, “Demand for packaging in South Africa declined and overall volumes in our businesses were 2% below last year. The volatile Rand had a negative impact on both direct and indirect exports. There was also a noticeable increase in imports of some canned food products. This is going to be a major challenge for us as we face an increasingly globalised market place… There was good demand for our products in Angola, Kenya, Nigeria and Zambia…”

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