MELBOURNE, AUSTRALIA — Australian packaging giant Amcor Ltd. has bought South African-based Nampak Holdings Ltd.'s Nampak Flexibles division.
A statement from Melbourne-based, publicly traded Amcor said Nampak Flexibles was South Africa's market leader in flexible packaging and it paid 250 million South African rands ($22 million) for the division.
Zanele Salman, group investor relations manager for Johannesburg-based Nampak, told Plastics News the price would be between ZAR 250 million and ZAR 300 million. “The final price will be determined based on the business's profitability in the year to 30 June 2016,” Salman said.
She said Nampak has been in discussions with Amcor for more than a year before the sale was announced.
Nampak Flexibles has extrusion, lamination and conversion capabilities across three plants in Cape Town (Western Cape), Port Elizabeth (Eastern Cape) and Pinetown (KwaZulu-Natal).
The Port Elizabeth plant focuses on manufacturing embossed film for the tire and rubber industries.
Amcor's statement said the plants generate sales of about ZAR 1.1 billion (US$94 million) annually.
Salman said Nampak Flexibles' key markets are fast moving consumer goods, the wine industry, and industrial and medical markets. Key customers are the British-Dutch giant Unilever; global food manufacturer Mars; and South African companies, including potato chip manufacturer Simba, which is part of the Pepsico group of companies; Tastic Rice Corp.; and Tiger Brands Ltd.
Nampak Holdings Ltd. has also announced separate sales of its corrugated and tissue divisions and Nampak Recycling.
Nampak CEO André de Ruyter said in a statement: “The disposal of these businesses forms part of Nampak's portfolio optimization strategy to unlock cash from low-margin divisions and redeploy it into high-yield and high-growth opportunities in the rest of Africa.”
Salman told Plastics News Nampak Flexibles is profitable, with margins between 3 percent and 4 percent, but the company's margins for other African businesses are between 18 percent and 20 percent.
“As part of its strategy to accelerate growth in the rest of Africa, Nampak prefers divesting from low-margin business in South Africa and using the proceeds to fund growth projects in the rest of Africa. Nampak plans to grow its footprint in the rest of Africa by considering projects in high growth and populous countries, including Nigeria, Ethiopia, Kenya and Angola,” she said.
Amcor CEO and Managing Director Ken MacKenzie said: "This acquisition provides a platform for growth in the African region. Nampak Flexibles has an experienced management team and is the market leader in South Africa. It services many of Amcor's existing global customers and creates the opportunity to leverage our product innovation and design capabilities into this market."
Nampak Holdings Ltd. has retained its glass, beverage can, closures, tubes, liquid plastics, liquid cartons, Petpak (which manufactures PET and high density polyethylene bottles and jars), Megapak (injection molded HDPE crates and drums) and R&D divisions. Its sales for the year ended Sept. 30, 2013, was ZAR 20 million.
Amcor manufactures rigid and flexible plastic packaging products for the food, beverage, healthcare, home and personal care, and tobacco packaging industries.
It has annual sales of $9.5 billion and employs 27,200 across 180 sites in 43 countries.