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Article by Nampak 30 August 2012

Zambia to drive growth strategy

Johannesburg, South Africa – A special focus on Zambia is helping drive Nampak’s growth strategy of generating at least 25% of its revenue from the rest of Africa by 2017. While Angola, Kenya and Nigeria are among the main priority areas, Nampak Chief Executive Officer, Andrew Marshall, says Zambia is key to a number of strategic opportunities for Africa’s largest packaging company.

The company plans to build on the success of its “mini Nampak” model in Zambia, which includes a wide range of packaging goods and services from the business’s diverse portfolio, such as metal cans, drums and crowns, folding cartons, paper labels and self-opening bags, as well as PET jars, HDPE bottles, crates, caps and closures. Presently, Nampak has two manufacturing sites in Zambia, namely Lusaka and Ndola.

The company is also gearing up to export liquid cartons for opaque beer, which are manufactured in Zambia, to other countries in the region. Nampak has an impressive track record in the category, having helped grow opaque beer sales in the country significantly since 2000!

The packaging company’s history in Zambia goes back to the mid1990s when two filling machines were installed in the country. At that time, the liquid cartons for opaque beer were manufactured in South Africa and exported to Zambia. However, duties and transport logistics added costs, and sales were approximately 16 million units per year. Volumes remained flat due to price.

To try and develop the opportunity in the market, Nampak Zambia acquired a flexographic printer and flame sealer in 2000. Sales increased to 60 million units in year one alone! In 2009, sales reached 180 million units and a second printer and flame-sealer were installed. Today, Nampak Zambia has capacity to manufacture 380 million units a year and has more than 30 filling machines locally. The company also services the filling machines and supplies spares.

Nampak’s presence in Zambia is a major draw card for the local SABMiller opaque beer operation, National Breweries Limited (NBL, [Status]) and their success in this market segment has prompted the company to develop opaque beer businesses in more than 10 African countries over the next three years. The beverage company believes that the informal beer market is about four times the size of the clear beer market, and has a place among a specific consumer segment.

Derek Perryman, Nampak’s Business Development Director, says that Nampak is making significant progress despite certain current constraints regarding access to the latest technology and skills. “We’re leveraging the available resources and developing local people, so they’re empowered to make world-class packaging for Africa, now and in the future.”

“The success of Nampak Zambia, as well as our experience in opaque beer, are key drivers of our strategy,” adds Marshall. “Similarly, we have a long history with SABMiller and we’re looking forward to growing with them, not only in opaque beer, but with other packaging mediums, as they grow their offering in Africa.”

The Zambian economy is expected to grow by 6.9% in 2012, picking up to 7.3% in 2013.

Presently, Nampak has a footprint in 13 African countries, including South Africa, as well as Angola, Botswana, Ethiopia, Kenya, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Zambia and Zimbabwe. The rest of Africa accounts for 20% of group revenue.

The company is well known for partnering multi-nationals in Africa. Two examples are a cartons manufacturing plant in Nigeria and a beverage can-making facility in Angola.

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