Johannesburg - Nampak has agreed with partners to build glass-bottle manufacturing plants to take advantage of growing demand for packed consumer goods and bottled drinks in the two countries where a quarter of Africans live - Nigeria and Ethiopia.
The Johannesburg-based company has reached a preliminary agreement with a partner for a factory in Ethiopia and is now seeking financing for a potential $68 million project cost, Chief Executive Officer Andre de Ruyter, 47, said in an interview at Bloomberg’s Johannesburg office last week. That will help supply drinks makers including brewer Heineken NV and soft drinks producer Coca-Cola, he said. Nampak has also “made good progress” on a Nigerian factory, the CEO said.
“Africa is the story for us,” De Ruyter said. “People talk about Latin America, they talk about India, China or other emerging markets, but we think the opportunity that we’ve got in Africa is so big and this is what we know we can do well.”
Consumer-goods companies such as US retailer Wal-Mart Stores and brewer SABMiller are expanding in Africa to take advantage of economic growth and rising household incomes. Many people in sub-Saharan Africa are moving away from subsistence existences and becoming consumers of packaged goods for the first time, according to De Ruyter, creating a growing market for can and bottle manufacturers. Nampak is also Africa’s biggest maker of beverage cans.
“There’s a youth bulge of people reaching drinking age” in Africa, De Ruyter said. Producing glass bottles and cans “makes a lot of sense”.