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(Updates with CEO comment on Angola in second paragraph)
Feb. 1 (Bloomberg) -- Nampak Ltd., a South African packaging company, plans to double earnings from businesses elsewhere on the continent to 16 percent of the total this fiscal year, Chief Executive Officer Andrew Marshall said.
“We will perhaps double profits from Africa by the end of this financial year,” said Marshall in an interview in Johannesburg today.
The company, which has operations in 12 other African countries as well as the U.K., is working on projects across the continent, and may enter new markets, Marshall said. He would not identify the projects or the countries as negotiations have not yet been concluded.
“Those projects will help increase earnings and sales to 25 percent of the group in four years’ time,” Marshall said. The maker of packaging materials from beverage cans to cement packets said it is waiting for the Angolan government to introduce laws that subject finished products entering the nation to import duties before it commits more funds in the oil- producing nation.
“We will then invest in two beverage-related plants totaling over $100 million,” said Marshall. The government had also promised to reverse consumption tax on packaging products manufactured inside the country, he said.
The company’s sole manufacturing plant in the oil-producing southern African country started operations in April 2011. It was built at a cost of $152 million, Nampak said in its annual report.
Angola’s government already committed to pass laws that will make imports more expensive by charging duties on finished packaging products made in the country.
“We were expecting the issues to be resolved this January. We continue to wait and hope it will be resolved soon,” said Marshall. If the new investments go ahead, Marshall said his company would employ about 200 more Angolans.
Nampak increased revenue from the rest of Africa to 1.3 billion rand ($170 million) in the year through September from 1.2 billion rand a year earlier. Total revenue was little changed at 15.8 billion rand, with sales in South Africa, the company’s biggest market, falling to 13 billion rand from 13.3 billion rand.
Nampak’s Nigerian unit has won a contract to provide Nigeria Breweries Plc, a brewer controlled by Heineken NV, with labels for beer bottles, Marshall said.
“We are currently supplying labels for 20 percent of their volume,” he said. Nampak is in talks with the brewer to increase the labels it provides to 40 percent of Nigeria Breweries’ total volume, he said. “We hope to invest in more capacity as soon as the company gives us a long-term contract,” said Marshall.
--Editors: Thomas Mulier, Robert Valpuesta
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