Ardagh Glass Packaging-Africa yesterday announced the heat-up of the N3 furnace at its Nigel production facility in Gauteng, South Africa this week.
“The delivery of another R1.5 billion mega-project, within budget and on time in just over 12 months from approval, is a great achievement by all involved,” it said.
The Nigel 3 (N3) expansion was announced shortly after the commissioning of the N2 expansion project at the same facility. It comprises a new furnace and four production lines. The expansion will add 50% more output to the facility’s production, making Nigel the largest glass container production facility in Africa and one of the largest and most efficient facilities globally.
Unfortunately, over the past 12 months during the N3 build, there had been a further decline in demand for glass packaging, mostly due to changes in packaging formats in the beer industry and a large decline in the wine industry in the Western Cape. In line with its commitment to fiscal discipline, the company has responded timeously by mothballing older furnaces in Gauteng and the Western Cape, in particular, where stocks of wine had reached excessive levels, the company said.
CEO Paul Curnow said, “While demand has been disappointing, it is normal for our industry to go through cycles where capacity exceeds installed demand and our facilities need to operate below name-plate capacity for periods of time.
“However, our commitment to long-term growth in South Africa remains unchanged. The recent investments in capacity leave us well positioned, with a modern asset base and reasonable spare capacity to be restarted at short notice, when sustainable demand supports additional production,” he said.
The two expansion projects have created more than 300 direct jobs in the Nigel area and significant ancillary supply-chain expenditure in local communities.