Home » Industry » Nampak to Consolidate Zim Businesses

South African packaging company Nampak is seeking to consolidate its Zimbabwe businesses for them to be run under one entity. Nampak wholly owns CarnaudMetal Box (CMB), and has two associates Hunyani Holdings (38,91% interest) and Megapak Zimbabwe (49% interest). Under the structure Megapak and Metal Box will be divisions of Hunyani but the entity will change its name to Nampak Zimbabwe Limited.

Nampak is following a two-pronged strategy to grow its business. Firstly, by unlocking further value from the base business of packaging by actively managing its portfolio and secondly by accelerating growth in Africa. At present the Rest of Africa contributes 15% of group revenue and 24% trading profit.

“There are tremendous growth opportunities on the continent and that Nampak is well-placed to pursue them,” said the group in its last results statement

In a cautioned statement, Hunyani said: “Nampak Limited proposes to expand its investment in the packaging sector in Zimbabwe. Nampak Limited therefore proposes to consolidate its existing business interests in Zimbabwe through the merger of Hunyani Holdings Limited, CarnaudMetalbox Zimbabwe Limited and MegaPak Zimbabwe (Private) Limited into one business entity, to be named Nampak Zimbabwe Limited.

The transaction is based on the acquisition of the entire issued share capital of CarnaudMetalbox Zimbabwe Limited and MegaPak Zimbabwe (Private) Limited in exchange for the issue of new shares in Hunyani Holdings Limited to both companies’ respective shareholders. The transaction will require approval from shareholders at an Extraordinary General Meeting”

In its March results, Nampak noted that the operations in Zimbabwe suffered from a lack of consumer demand and generally poor economic conditions.

CarnaudMetalbox is the sole supplier of metal cans, crowns and aerosols in Zimbabwe and a leading manufacturer of plastic bottles.

It has the capacity to produce about 3 million food cans per month but the capacity is under threat from growing importation of caned products from South Africa. Its equity is valued under $1 million.

Megapak’s other shareholder is Delta Beverages. It is the only company that has a crate factory in the country. The company exports crates in the region but has not been performing well in terms of sales due to competition from low cost producing nations in the same market.

Hunyani at its last AGM in March said it is expecting the full year operating profit in October to be higher than 2013 but the pre-tax will be lower because of the absence of one-off profits on property disposals which were earned last year.

The group has just completed a restructuring and repositioning exercise.

Source : The Herald