On 25 March 2015 Nampak announced a series of transactions to deliver on its strategic objective to unlock further value from its base business, as well as progress on its objective to accelerate growth in the rest of Africa.
In a sale of a low-margin business, the company reached an agreement with Amcor for the sale of its flexible division for a maximum target price of R300 million. The transaction is subject to approval by the competition authorities.
The diversified packaging manufacturer announced in November 2014 that it had agreed to sell its corrugated and tissue divisions to Ethos Private Equity (Ethos). As an important provider of raw material to these divisions, Nampak Recycling was in a subsequent transaction sold to Ethos for R76.3 million, subject to approval by the competition authorities. The sale is expected to be completed early in the second half of 2015.
Nampak CEO André de Ruyter comments, ‘The disposal of these businesses forms part of our portfolio optimisation strategy to unlock cash from low-margin divisions and redeploy it into high-yield and high growth opportunities in the rest of Africa.’
In line with this strategy, the company has concluded a memorandum of understanding for a majority stake in a proposed greenfield glass furnace in Ethiopia, about 120km north of Addis Ababa.
‘This project has the potential to meet significant glass demand in the fast-growing Ethiopian beer market,’ continues De Ruyter. ‘To date, the land for the works has been secured on a long-term lease and a source of sand has been identified. We are excited about this project and are working hard to firm up the business case.’