Nampak may double capacity at Nigerian can factory

JOHANNESBURG (Reuters) – Nampak Ltd, Africa's biggest packing firm, is considering doubling the capacity of its Nigerian beverage can factory to meet fast-growing demand in Africa's biggest economy, its chief executive said on Thursday.

Johannesburg-based Nampak, a major supplier of plastic milk bottles in Britain, paid more than $300 million for Lagos-based can maker Alucan earlier this year. Alucan, which competes with unlisted GZ industries and imports, has the capacity to make 1.1 billion cans a year.

"We have the ability to double the capacity of that facility with relatively modest incremental investment and we are seriously considering that," Andre de Ruyter, chief executive officer told Reuters in an interview. "I am quite bullish on the Nigerian market. It is Africa's largest economy, it is showing rapid economic growth."

The Nigerian beverage can market, which is about 1.5 billion cans per annum, is expected to grow rapidly as rising incomes encourage consumers to switch to factory-made beers and soft drinks. Global brewers such as SABMiller and Heineken NV are setting up or increasing their capacity in the country.

Nampak, which makes about 24 percent of its trading profit outside South Africa and Britain, has been expanding on the rest of the African continent in recent years and could generate half its profit there in five years, de Ruyter said.

"We are very keen to grow our African footprint and we will be looking at potential further acquisitions and green fields projects," he said.

Nampak, which operates in more than a dozen other African countries that include Kenya, Zambia and Mozambique, has just installed an extra production line at its Angolan can manufacturing plant.

The Luanda-based factory, the only one in the oil-rich southern African country, has the capacity to produce 1.7 billion cans per year.