Nampak flags up possible UK bottle expansion and African growth as key

By Rory Harrington

- Last updated on GMT

Related tags: Africa

Nampak Ltd said it is eyeing a significant potential increase in its UK plastic bottle business as it awaits the outcome of a contract tender for a new super dairy.

The South Africa-based company told FoodProductionDaily.com that should it net the in-plant contract to supply HDPE bottles to the new dairy, its UK business could leap by as much as 50 per cent.

“I understand that we have been included on the shortlist and we should find out in August or September this year,”​ said group investor relations manager Graham Hayward. “It would be a significant addition to our UK operations but at the moment there is no certainty that we will be successful.”

Nampak highlighted the opportunity for growing its UK plastic bottle share as it announced an 18 per cent rise in first half year profits. The company said the increase had been underpinned by stronger performance in its European and Sub-Saharan operations.

While its European plastic segment saw year-on-year revenue rise from £54m to £63m, profits actually fell from £4.4m to £3.3m – “affected by lag in polymer price recovery”,​ said the company.

The firm said it was now on a sounder financial footing are selling off or closing a raft of under-performing businesses.

Growth in Africa

Nampak is also forecasting major growth in its business in the rest of Africa – which it counts as all sub-Saharan operations outside its native South Africa.

Hayward explained that Nigeria is seen as a major prospect thanks to its 180m population and economic growth. Expansion in Angola was also expected, which has already seen the launch of R1.2bn can line (€121m).

“We further see significant potential growth in the West African nations of Kenya, Tanzania and Uganda,”​ he added.

The company forecast that the proportion of company revenues obtained from its Rest of Africa operations would climb from 8 per cent in 2010 to 20 per cent by 2015.

Proportionally, revenues from Europe are predicted to fall from 8 per cent to 5 per cent.

“With the sale of the cartons business, plastics will make up all our European business,”​ said Hayward. “We expect the headline figure from the region to remain broadly stable, although this will be a smaller proportion of overall revenue.”

Related topics: Processing & Packaging, Emerging Markets

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