Nampak Takeover Bid Part of Expansion Strategy

Africa’s leading packaging company Nampak Ltd (NPK) has revealed it is looking to expand in Nigeria to counter falling profit margins in its main South African market.

Johannesburg-based Nampak has agreed to buy Nigerian packaging company Alucan for R3.3billion, which is its biggest-ever deal and is also eyeing a plastics manufacturer in the country.

Nampak, which supplies such well-known brands as the Coca-Cola Company and SABMiller Plc, also has its eye on expansion in Ethiopia and Ghana and will seek to grow by acquisition.

The company’s Chief Executive Officer Andre de Ruyter told a Bloomberg reporter that growth opportunities to take his company to the next level only came from Africa.

Nigeria is now the fastest growing country on the continent, since GDP growth rate was recalculated earlier this year and Ghana is one of the most important untapped markets in the west.

De Ruyter said: “There are sizable opportunities available in Nigeria. I am bullish on Ethiopia and Ghana we need to look at quite closely.”

The company which has operations across sub-Saharan Africa, is unlikely to look for growth in countries which have instability such as the Central African Republic and Niger.

Sales growth grew by 12 percent during the first half-year but the profit margin in South Africa dipped to 8.5 percent from 9.1 percent a year earlier, compared with a total margin of 11 percent.