NAM PA K BE V CAN
Africa’s leading packaging company expands its reach www.nampak.com
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UNLOCKING VALUE
ACROSS AFRICA
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Already established as the packaging leader in Africa with operations in 11 African countries outside of SA, Nampak continues to take advantage of the continent’s upward growth trajectory Writer: Emily Jarvis Project Manager: Ben Wigger
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ince its inception more than 50 years ago, Nampak Bevcan has demonstrated its capabilities in the manufacture and supply of beverage cans across the African continent to become known as one of Africa’s leading lights. Throughout this prosperous existence, the company’s footprint has gradually grown to include surrounding markets such as Namibia, Botswana, Zimbabwe, Mozambique, and most recently Angola and Nigeria. Throughout its operations, the launch of the “buy better, make better, sell better” business improvement initiatives, as well as concerted efforts to improve the company safety record continue to drive Nampak forward. In 2014, the Group achieved a Level 3 BBBEE rating, an improvement on the Level 4 rating in 2013. In South Africa, the business environment is set to remain challenging this year, however, Nampak will continue to focus on ways to unlock value from its base business. Efficiency gains from the conversation of many of its beverage can lines to aluminium from tinplate, as well as from the new glass furnace, are expected to contribute earnings in the year ahead. Moreover, Nampak is strategically well-placed in the rest of Africa, with strong market positions and a growing presence. The Group is pursuing its strategic objective to accelerate growth in the rest of Africa to ensure that this side of the business contributes to sustainable earnings growth in the long term.
Bevcan Nigeria acquisition
The packaging company reported a 10 percent increase in Group revenue for the year ending September 2014, in line with growth expectations. Furthermore, Nampak said trading profit from the rest of Africa increased by 25 percent to R616 million mainly due to the contribution of the newly acquired Bevcan Nigeria and the continued strong performance from the Angola beverage can operation. Nampak’s CEO commented that “the acquisition will significantly increase Nampak’s presence in Nigeria which is Africa’s second largest economy”. Alucan Packaging is situated in the Agbara industrial area which Nampak said was “an ideal location” close to Lagos and to major beverage producing customers as well as having “a reliable source of gas which will be used for heating and power generation”. “Nigeria, with a population of more than 170 million people, has experienced good growth in demand for beverage cans and this is expected to continue. The acquisition and the potential to acquire the plastics company will further contribute to our stated growth strategy in the rest of Africa,” the CEO adds. Not content with this regional dominance, Nampak Bevcan continued to increase its geographical reach. According to Erik Smuts, Group Executive of Beverage Cans at Nampak, the business aspires to be “the preferred supplier of beverage packaging in Sub-Saharan Africa”. Although this might sound like an ambitious statement, recent developments mean this target should become a reality.
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“We have built a plant in Angola, which has been operating for more than three years and as of last year has a second production line installed. The newly acquired Bevcan Nigeria also plays an equal part in our success. As there will be a lot of focus getting this business up and running, there are exciting times ahead,” Smuts highlights.
Competitive drive
Although continued growth across Africa will undoubtedly give Nampak Bevcan a distinct competitive advantage over manufacturing alternatives, the company has several other strengths to call upon. “We have proved in South Africa, where we do not always have ideal conditions to operate, that we manage to work with what is available,” explains Smuts. “Despite our successes, we have huge respect for the other global can makers, and we know that we will have to be at our best in order to defend our position.” This resolute and determined attitude has put Nampak Bevcan in good stead for its Angolan operation as Smuts explains: “We operate in a place where there is very little infrastructure. We generate our own electricity and tanker in all of the water we require. But we are used to operating in areas where it is tough and you can’t always rely
on external service providers other facilities or suppliers. This is critical to our competitive nature and we intend to drive this further to make sure we become even more successful in these areas.” Despite the operational difficulties in Africa, Smuts believes that Nampak Bevcan has managed to position itself in line with some of the industry’s biggest beverage can manufacturers. “In South Africa we are more competitive in our pricing than Europe and many other developed countries in the world. “What makes us different is our strong relationships with customers, good service and a competitive offering. Our adventurous nature and an aggressive cost reduction attitude are also strong characteristics,” he reveals.
NOVELIS
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ovelis is the world’s premier producer of rolled aluminium and the global leader in aluminium recycling. Our unique combination of advanced technology, superior expertise and global footprint allows us to reliably meet the needs of our customers wherever they operate. • Novelis is the largest single producer of aluminium rolled products with an estimated 14% of the world’s supply. • We focus our expertise on the most demanding segments of the rolled aluminium market – can, automotive, consumer electronics and architecture – which uniquely positions Novelis as the partner of choice for new product innovation. • In response to the growing demand for rolled aluminium in our premium markets, Novelis has invested more than $1.7 billion in global expansions in the past three years.
Positioned in line with the industry’s biggest can manufacturers
• As the leading low-carbon aluminium maker, we offer our customers the ability to make products with a smaller environmental footprint. Our objective to reach 80% recycled metal input across our products by the year 2020 is a key component of our strategy. Based in Dubai, Novelis MEA Ltd delivers premium material solutions and technical services to our customers in the Middle East, Africa and India.
T +971 (4) 3760 700 F +971 (4) 3760 701 E helio.lima@novelis.com
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Not just aluminum, Novelis Aluminum.
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Novelis is the global leader in aluminum rolled products and the world's largest recycler of aluminum. We operate in nine countries, have approximately 11,000 employees. Drawing on our expertise, commitment to innovation and world-leading technology, we deliver sustainable solutions for the most demanding applications, including automobiles, architecture, beverage cans and consumer electronics.
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AFROX
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frox is a leading supplier of gases, welding and safety products, operating in South Africa and 11 other African countries. Afrox is part of The Linde Group, a world leading gas, engineering and technologies company. In April 2006, Afrox signed an initial contract with Nampak to supply Liquefied Petroleum Gas (LPG) to numerous operations throughout South Africa. The contract was extended in April 2014. The supply of bulk LPG to the Bevcan operation in Cape Town accounts for the major percentage of the total Nampak volume. Afrox is proud to be associated with Nampak and we value our wellestablished business relationship.
Enhancing the business
introduction of aluminium beverage Regardless of its current market cans, which have a higher intrinsic position, Nampak continually looks value, we expect that collection rate to to improve and enhance its day-toincrease.” day activities. “In South Africa, we Furthermore, Nampak Bevcan used to exclusively produce tinplate remains committed to sustainability beverage cans, but we started a in other areas of the business and has conversion to aluminium in 2013 due to gone through quite a large capital customer-driven industry trends and reinvestment programme to become technological advances,” cites Smuts. more environmentally friendly. “The For Smuts, this latest move will go introduction of new equipment has a long way to improving the recycling enabled us to significantly cut down on rate of beverage cans across South energy consumption. Africa. In fact, he believes that South “The overall carbon footprint of the Africa can achieve levels similar to business is coming down rapidly and that of Brazil, which currently has we have very aggressive targets going a collection rate of more than 98 forward to reduce this even further,” percent. “We have a sister company Smuts emphasises. called Collect-A-Can, which is a Looking forward, Nampak Bevcan is partnership between ArcelorMittal and looking to expand its footprint in Africa Nampak that facilitates the collection even further and will consider wider of cans,” he says. opportunities too, as long as they “The recycling rate we have make good business sense for both achieved in South Africa for used our customers and our shareholders. beverage cans is more than 72 percent, Whatever the future has in store for which is the highest collection level Nampak Bevcan, you can be sure for any beverage packaging format in that product quality and customer Southern Africa, so we are very proud satisfaction will remain key concerns of this achievement. But with the for the business.
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www.afrox.com
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Africa’s leading gases and welding company The Afrox gases, welding, cutting and safety product range of equipment meets and exceeds international safety standards and is backed by decades of Afrox reliability. When quality, reliability and safety counts, select Afrox as your total solutions provider.
AFROX Customer Service Centre: 0860 020202 www.afrox.com 160x96.indd 1
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Coatings perform a dual role in protecting both the beverage from the metal container and the container from the beverage, both aspects becoming increasingly important as more aggressive and flavour sensitive products are introduced into the market.
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NAMPAK BEVCAN Building 11A, First Floor, Woodlands Office Park, Western Service Road, Woodmead, Gauteng, South Africa Tel: +27 11 519 7700 Fax: +27 11 519 7800
www.nampak.com