Johannesburg - Packaging company Nampak thrived off its operations outside of South Africa and planned for them to account for half of its business by 2015, chief executive Andrew Marshall said yesterday.
In the year to September, trading profit for the rest of Africa gained 60 percent to R506 million, compared with a 15 percent fall in local profit.
Its share price leapt after the release of the results, touching a high of R33.20 before closing 5.2 percent up at R32.40.
Marshall said he would be disappointed if the target of 50 percent African business by 2015 was not reached given its acquisitions and the demand.
Africa provided 36 percent of group profit, overshooting the company’s expectations of 35 percent by 2015 on the back of its numerous acquisitions and good performances from Nigeria, Angola and Kenya.
Marshall said demand and sales were gaining at a marginal 2 percent or 3 percent in the UK and South Africa, while the African operations were growing at a higher pace.
The company plans to open a second beverage can line operation in Angola after the first line reached capacity and could not cope with demand.
Marshall said the factory was churning out between 70 million and 80 million cans a month and a second line had become necessary.
Earlier this week, Nampak bought Nigerian beverage can manufacturer Alucan Packaging for R3 billion and has plans to buy another rigids manufacturer in the country.
“Africa is just doing fantastically well for us and the growth is there, the margins are better than in UK and SA where we also operate, so it’s the obvious place for us to expand,” he said.
“The challenge is normally to get going in the country, but once you’ve got your kinks in place, it’s relatively simple thereafter, not a lot different to doing business here in South Africa,” Marshall said.
The challenges were mostly related to infrastructure such as railway, water, roads and power, motivating the company to generate its own electricity.
Headline earnings a share for continuing operations gained 8.66 percent to R2.175. The final dividend was lifted 10 percent to 98c a share. - Business Report