South Africa furnace opening part of much bigger picture: Nampak

By Rachel Arthur

- Last updated on GMT

South Africa - and beyond
South Africa - and beyond

Related tags South africa Africa

Packaging company Nampak has opened an additional glass furnace at its manufacturing plant in Roodekop, South Africa, while eyeing up growth across the rest of the continent as well.

The company says improvements in infrastructure, macro-economic reforms, and investment from multi-national companies is making the rest of Africa attractive for expansion.

Opportunities across Africa

Nampak’s main business is in South Africa, accounting for over two-thirds of the group’s revenue. However, operations in the rest of Africa continue to grow and currently contribute a quarter of the company’s trading income. The group says it wants to accelerate this growth.

André de Ruyter, Chief Executive, Nampak, told he is ‘very positive’ about prospects in Africa.  The demographics clearly indicate that the continent’s fast-emerging middle class, with its substantial spending power, is going to impact significantly on the fast-moving consumer goods environment (and particularly food and beverage),"​ he said.

Nampak recently acquired a beverage can manufacturer in Nigeria for US$300m. The factory produces about 1bn cans per annum and expansion will see capacity rise to 2bn cans per annum in two to three years. It is also doubling its beverage can-making capacity in Angola.

In terms of glass, Nampak is looking at both greenfield and brownfield growth opportunities in West and East Africa. 

Rob Morris, group executive, Africa and glass, told this publication, “Economic growth levels in the rest of Africa are significantly higher than South Africa. Prospects of ongoing growth are good. Multinationals are investing and we are satisfying their packaging requirements.

The challenges we face in expansion are similar to what other organisations experience when doing business in Africa,"  ​Morris said. “These include availability of adequate infrastructure, and in some countries energy availability. Bureaucracy, corruption, regulatory uncertainties and skill availability are among others.

That said, we have seen a lot of improvement in some of these areas since we started doing business in the rest of Africa and we are positive that more improvements will come with the implementation of various infrastructure projects and further macro economic reforms."

Nampak secures long-term supply contracts

The 2.1bn rand ($200m ) furnace, opened in South Africa this month, is the third at the Nampak Glass factory in Roodekop. It will increase the plant’s capacity from 195,000 to 295,000 tons per annum, and create around 140 jobs.

Nampak has already secured long-term contracts to supply a mix of glass bottles and jars, which come from customers in the beer, wine, spirits and jams/spreads markets.

Of the 1.2bn rand invested in the furnace, half was spent on developing the building and the other half was used to buy the equipment.

The furnace is designed to manage energy, waste and water efficiently, the company claims. Cullet batch preheating is powered by waste gases (which also reduces the emissions of CO2 and NOx), there is a closed-loop water purification system, and an ESP filter which also reduces emissions. A rotary uninterrupted power supply reduces the risk of power outages and surges.  

Furnace follows cullet investment

In 2010, Nampak opened a 160m rand ($14m) cullet processing plant at the glass factory, which processes around 80,000 tons of cullet (glass that is crushed and ready to be re-melted) a year. The cullet is sourced from 4,000 SMMEs (small, medium and micro enterprises). 

Once the third furnace commences production, it will create more demand for cullet. The company says this will create a ‘cycle of opportunity’ for SMEs and help limit the impact of waste on the environment. Cullet currently replaces up to 55% of virgin raw material at the factory.

Nampak is a packaging manufacturer with operations in South Africa, United Kingdom, Angola, Nigeria, Zambia, Kenya, Botswana, Zimbabwe, Malawi, Mozambique, Tanzania, Namibia and Ethiopia. It produces packaging products from metal, paper, plastic and glass in South Africa and the rest of Africa, and makes plastic bottles in the UK.

Related topics Processing & Packaging

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