Nampak to invest R4bn in glass business

21 November 2011

JSE-listed packaging company Nampak is to buy out the German partner to its local glass business, and to invest up to R4-billion over the next five or six years in building new glass furnaces in South Africa and elsewhere on the African continent.

Nampak said in a statement last week that it would spend R938-million acquire the 50% stake in its glass business that it did not own from Bayerische Flaschen-Glashuttenwerke Wiegand & Sohne (Wiegand-Glas).

“This acquisition is part of our strategy of investing in our core businesses where we believe we have competitive advantages,” said Nampak CEO Andrew Marshall. “As a result, Nampak is looking to grow its glass operations in South Africa and the rest of Africa.

“This will be more easily achieved by us owning 100% of the glass business.”

He added that although Wiegand-Glas would no longer be shareholders in the business, they had agreed to remain as the company’s technical service provider.

The private German glass making business has been the technical partner to Nampak’s glass operations for the past 10 years, having acquired a its 50% stake in the business back in October 2005 for €18-million.

Nampak will fund the acquisition through available cash resources and existing debt facilities.

World-class manufacturing plant

Nampak Wiegand-Glas has a world-class glass manufacturing plant, featuring the latest in international technology, at Roodekop, outside Johannesburg.

It has two glass furnaces, and supplies a diverse range of returnable and non-returnable glass bottles to the beverage and food industry. This includes both standard-sized bottles as well as customer-specified designs and colours.

While Nampak supplied a range of packaging materials in 12 African countries beyond South Africa’s borders, this did not include glass, Marshall told Business Day last week.

As such, the company would spend R4-billion to build glass furnaces in South Africa and in other countries in Africa in the short- to medium-term. A third glass furnace was planned for South Africa – it would take about R1-billion and 18 months to build.

Feasibility studies were being evaluated on where Nampak would start with its plans to take on its competitors in its three largest markets – Angola, Nigeria and Kenya – he told the paper.

SAinfo reporter

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