DURBAN - HUHTAMAKI, a global provider of sustainable packaging solutions for consumers, was investing in new fibre packaging capacity in South Africa by setting up a new manufacturing unit in KwaZulu-Natal to serve its existing and new egg-packaging customers.
KZN is the province that makes the second-largest contribution to the country’s gross domestic product.
The new facility would be located close to the Port of Durban, enabling competitive exports of egg packaging for customers across East Africa, the firm said in a statement yesterday.
Fiber Food service Europe-Asia-Oceania president Eric le Lay said the addition of a unit in KwaZulu-Natal was an important addition to their fibre packaging footprint in South Africa.
Not only would it provide efficiencies in the company’s service to customers in South Africa, but an additional benefit in terms of proximity to a major port, which would drive access to markets across East Africa.
“The new facility sets us up to better meet the growth of the fibre-packaging sector and future demand for sustainable packaging. It also strengthens our position in the region significantly,” said Le Lay.
The investment was said to underline Huhtamaki’s commitment to the growing customer base in South Africa and East Africa, as the addition of several new lines allowed a significant increase in capacity.
Manufacturing operations were expected to begin during the fourth quarter, and the facility was expected to employ about 30 employees when fully operational.
Huhtamaki has operated in South Africa since 2000.
The company currently employed about 530 people across four manufacturing units and manufactured fibre packaging for eggs and fruits, foodservice packaging and flexible packaging. Huhtamaki South Africa has a level 4 rating in the government’s broad-based black economic empowerment programme.
While Huhtamaki said it could not quantify its exports, it said its growth would come more from selling more with additional capacity in the KZN area, where they could serve existing customers in the area locally and thus free capacity in the other facilities in Springs and Atlantis to produce more to their local customer.
With the additional capacity, the business said it would be able to serve new customers in KZN.
The additional capacity and the location close to an export port could help the business tap into markets outside South Africa, like those along the Eastern coast of Africa.
Huhtamaki said it did not make sense to transport fibre packaging for long distances, as it took up relatively a lot of space.
Local general manager Shane van der Nest said they exported egg packaging to egg farmers in Namibia, Malawi, Botswana, Mozambique and Zambia.
“Export currently is 9 percent of our current business. Our biggest export countries are Namibia and Botswana,” said Van der Nest.
The targeted growth was into the export market along the eastern side of Africa and the provision of a better service to their inland customers as they were supplying coastal customers from Gauteng. Through manufacturing in KZN, the company said it could harvest sales they were currency losing inland because of capacity constraints.
BUSINESS REPORT