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nampak bevcan

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A CAN-DO ATTITUDE

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Nampak Bevcan focus MANUFACTURING

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Last summer South Africa Magazine covered Nampak’s investment in a new canning plant in Angola. Nampak Bevcan’s investment was to ensure that its Angolan customers were more efficiently serviced and signalled that Nampak’s African expansion was back on track.

By Ian Armitage

ngolata, the beverage can-making plant in Angola completed last year by South Africa’s Nampak, has “exceeded expectations” according to Erik Smuts the managing director of Nampak’s Bevcan. “We always knew the market would require the installation of a second line, but we did not expect the demand to come so soon,” he says. Smuts believes that there is more potential to invest, given the huge opportunities that exist in the once war-torn country. It is easy to see why – Angola is one of sub-Saharan Africa’s largest and fastest growing economies, with a rapidly expanding financial sector and huge potential in areas such as agriculture, telecoms and energy. “Overall we are very happy with how things are now going in Angola,” he tells South Africa Magazine. “Our operation is getting up to speed – and we are running close to full capacity on our single line investment.” Construction of the plant in the Viana Industrial Zone in Angola’s capital Luanda started in 2008 after SABMiller awarded Nampak Bevcan a contract to supply cans to CocaCola Bottlers Luanda. However, Bevcan’s Angola project was initiated in 2004- and production only started in 2011. It was a long time coming. “This is Bevcan’s first and Nampak’s single largest greenfield investment outside of South Africa,” says Smuts, detailing the background. “Angola is the fastestgrowing economy in Africa and possibly in the world.”

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Nampak Bevcan focus MANUFACTURING

The firm had been exporting cans to Angola from South Africa. With the volumes growing, the decision was made to install a local can line. “It was a matter of saying, if we go in there, we can sell every can we can make. Because we were already supplying many cans to the country from South Africa, we believed that we needed to build the facility in Angola to secure our business. Potentially we could have lost the entire market should another player have built a line in the country.” Things have turned out well and Bevcan is now more effectively servicing Angolan customers. The main benefits that Bevcan bring to its customers

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in Angola are reduced lead times, substantially lower working capital costs in imported material stockholding, storage and demurrage and finally, as a result, a lot of the logistical headaches of complex and long import supply chains have been removed. Smuts says this success could lead to other expansion opportunities. “Cuca BGI and Coca-Cola Bottling Luanda are currently our main clients in Angola but we are definitely looking at expanding our client base. We are in discussion with some of the other players in the market.” While there are huge opportunities, he cautions that Angola has not been an easy place to work.

Carlson Wagonlit Travel Nampak have partnered with Carlson Wagonlit Travel (CWT) South Africa for the past two years in managing the organisation’s substantial travel programme. CWT is a global leader - with 2011 worldwide sales exceeding US$ 28 billion - specialising in business travel management. Nampak successfully utilise CWT proprietary tools and expertise to operate a wellmanaged travel programme, characterised by exceptionally high levels of adoption of on-line booking and approval processes. This enables the organisation to optimise its travel spend through effective policy enforcement, maximising savings opportunities and steering traveller behaviour in line with its general company strategies.


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PPG Packaging Coatings is a leading producer of coatings, inks and compounds for the Packaging industry. We serve the beverage, food, cosmetic, personal care and pharmaceutical markets as well as the paint and chemical industries. Through our technical expertise, our service excellence and with over 125 years of experience, PPG Packaging Coatings constantly adapts and develops versatile, innovative and high performance coatings with outstanding appearance.


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Nampak Bevcan focus MANUFACTURING

“One of the biggest difficulties we’ve found is around red tape. The high levels of bureaucracy are a problem, which we discovered first hand. In some ways this is understandable given the developing nature of the economy and the desire to build a sustainable model. But, it certainly has presented challenges and delays in our project. “I would say that doing business in Angola takes more than money; you need to be patient. But there are wonderful opportunities.” Angola’s manufacturing sector is in its infancy and has primarily been based on product assembly. “From what I know we are probably one of the first that started investing into serious manufacturing, especially at this level of sophistication,” says Smuts. The current infrastructure is not supporting such operations however and is very limited. Although there is electricity, the stability of the national grid is not good enough to support wide-scale manufacturing. 8

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“We generate all our own electricity. The same goes for water supply where as yet there is no piped water to our site. A pump station is currently being built to supply the area, but in the meanwhile we are trucking in our requirements.” He says that while there are challenges, the manufacturing sector is definitely starting to grow. “At a macro level the Angolan government has spent huge quantities on basic infrastructure. Luanda has effectively been rebuilt! This does augur well for the future, but in no small measure we have been pioneers in Angola. ” What advice would he give to other foreign investors looking to do business in Angola? “The first thing is: be patient. There remains substantial bureaucracy which needs to be carefully navigated. There are many rules. Do not take shortcuts. There will be the temptation to start projects or ventures prior to getting all the approvals.


PPG Industries is a leader in its markets, a streamlined and efficient manufacturer and operates on the leading edge of new technologies and solutions. With more than 125 years of existence, PPG is today a global coatings and specialty products manufacturer with over two-thirds of our $13.4 billion sales in 2010 generated by our coatings activity. Strengthening the commitment to this sector, PPG went through multiple acquisitions in recent years, the most significant in EMEA being the Ameron acquisition in 2006, Sigma Kalon in 2008. They provided access to new market sectors in EMEA in Architectural, Marine and Protective coatings and increased our presence in Automotive, Refinish, Industrial, Aerospace and Packaging coatings businesses. It is our vision to continue being the world’s leading coatings and specialty products and services company, serving customers in construction, consumer products, industrial and transportation markets and aftermarkets. PPG has manufacturing facilities and equity affiliates in more than 60 countries around the globe. Not only that, PPG is one of the world’s leading producers of packaging coatings. We supply innovative, high-performance products for virtually every end-use. The metal packaging industry is becoming increasingly innovative. New shapes, novelty printing and distinctive decoration help brand-owners’ products stand out on the shelves. To make this happen, PPG Packaging Coatings is constantly adapting and developing coatings to be versatile, easy to apply, reliable and to achieve outstanding appearance.

PPG Packaging Coatings operates in Europe, Africa, Asia, Australasia and on the American continent. Our corporate R&D centre is located in Alison Park, Pennsylvania where chemists dedicated to the Packaging business focus on long-term projects. Our development laboratories are located around the world to respond to local market needs. PPG Packaging Coatings’ products and services offer a complete range of solutions for the Beer & Beverage cans and easy-open-ends, food cans, aerosols cans, tubes, general line cans and drums, caps and closures and peel-ends markets. Our product portfolio comprises technologies for both aluminium and steel substrates, encompassing both internal & external coatings with products that combine superior performance at value-added costs. Also included are coatings designed for plastic tubes made for thermal and UV curing, combined with all the relevant application processes. Since PPG Coatings South Africa has a unique manufacturing facility in Alrode, Johannesburg, we are well positioned for local value-add to PPG’s global cutting edge technologies. Our local access to PPG’s global research network and quality approach coupled with our local infrastructure and support makes PPG an essential business partner. PPG Coatings South Africa has successfully supplied Bevcan with external decorations for the 2PC Beer and Beverage can for more than the past decade. We are well positioned to support the Beverage market with all their internal and external coating and Ink requirements. This is just one way in which PPG supports their customers with quality systems, inventory management and the overall integrity of their cans.

www.ppg.com/packagingcoatings www.southafricamag.com

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Nampak Bevcan focus MANUFACTURING

We have been fastidious in ensuring that we comply with Angolan legislation to avoid further delays and substantial costs at a later period in our investment. “One of the reasons for the delay in the project is that we did not take shortcuts. We know that if we chose to follow such a path it certainly would have compromised our investment in the long-term. I would caution against that. “I would also caution any investor to assess the costs very carefully. There are a many hidden costs in the system. “Ultimately however we hope to install a second production line in Angola and continue to grow our presence in the market. We are in discussions with our major customers to secure the volumes for this line - the original

Cuca BGI and Coca-Cola Bottling Luanda are currently our main clients in Angola but we are definitely looking at expanding our client base. We are actually in discussion with some of the other players in the market

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Industrial Oleochemical Products Packaging Coatings SA has been supplying Nampak Bevcan with internal coatings under license from Akzo Nobel for both two piece food and beverage cans for over 2 decades and pride ourselves on outstanding and consistent quality products. A brand new state of the art production facility was commissioned in Durban in 2010 to cater for both current spray lacquer technologies as well as BPA free material.


Our environmentally friendly, water-based Aqualure™ range of low VOC can coatings are recognized globally as providing the highest levels of internal protection of metal cans in the beer and beverage markets.

Manufactured under licence from Akzo Nobel by PACSA, a division of Industrial Oleochemical Products, Aqualure™ 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 lavour sensitive products are introduced into the market.

www.oleo.co.za Tel: +27 31 461 8680 Fax: +27 31 461 3743


plant footprint was designed for more than one production line. Everybody knows the primary investment came at a massive cost if compared to similar installations anywhere else in the world, but the benefit of putting the second line in is that it should cost substantially less. This is where additional value can be unlocked for our customers. A one-line operation on its own is not necessarily an attractive proposition for a can maker. “When we invested in Angola the view was always to have more than one line and we are at the point now where we are looking to expand this investment.� Generally Nampak’s strategy appears to be delivering good value as demonstrated in the reported revenue growth for the first half of the 2012 financial year.

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Everybody knows the primary investment came at a massive cost compared to anywhere else in the world, but the benefit of putting the second line in is that it should cost substantially less and this is where the value gets unlocked for our customers


Nampak Bevcan focus MANUFACTURING

Steady growth in profits from South Africa and the benefits from investments in the rest of Africa are expected to contribute to an improvement in profitability for the full year, Smuts says. “Bevcan is in a positive space at the moment. Generally the demand for beverage cans has improved. There is clearly a favourable swing in consumer perceptions and attitudes towards cans. This is very exciting. We are investing quite heavily behind this improved picture. We have started a big investment programme to recapitalise the business. At the request of our customers we are installing new capacity that will convert much of the industry from steel to aluminium cans. We anticipate that this demand for aluminium material will grow, which

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Nampak Bevcan focus MANUFACTURING

is likely to result in a conversion of the entire market over the next few years. We expect the first new high speed aluminium production line to be installed in one of our South African factories some time next year.” What is the secret to Bevcan’s success? Simple: it’s people. “We have an exceptional team and a policy of trying to attract the best people into our organisation. We have several technical experts on board. In my mind these are some of the best in the South African manufacturing industry. Not only are they very good at beverage can manufacture, but also many have been with us for a long time. This depth of experience really contributes to our success. We have people that can make a plan when it is needed and react quickly to our customers’ requirements. We call this the CAN-DO attitude of Bevcan!!” As the only beverage can manufacturer in Southern Africa providing steel beverage cans and aluminium ends, Bevcan prides itself on delivering absolute customer satisfaction. Nampak is now a more focused organisation, and with a stronger balance sheet, it is actively pursuing a number of new growth opportunities in South Africa and the rest of Africa. To learn more visit www.nampak.com. END

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Bevcan is in a positive space at the moment. We are seeing good growth across most sectors. Generally the demand for beverage cans is good and there is clearly a favourable swing in consumer perceptions


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Nampak Centre 114 Dennis Road Atholl Gardens Sandton Tel: +27 11 719 6300 Fax: +27 11 444 5761

www.nampak.com

NAMPAK BEVCAN  

SAMAG 26 NAMPAK BEVCAN FEATURE

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