Amcor has acquired South African packaging company, Nampak Flexibles, for AU$28m.
Amcor has made sixteen acquisitions in the last four years and chief executive and managing director, Ken MacKenzie, has stated more than once that growth by both acquisition and organic growth is a key part of his strategy. At the end of January, MacKenzie announced that he would retire at the end of this financial year.
One year ago, during his announcement of the first results since Amcor’s demerger in 2013, MacKenzie stated, "There are currently 20 names in the pipeline worth $2 billion, but we won't pull the trigger on all of those. We've had a good track record in the last four years or so, but it's not growth for growth's sake - it is value creation for shareholders. We are very disciplined and have strict financial criteria for a 20% return on investment three years after the acquisition."
Nampak has three plants in Southern Africa that give the company extrusion, lamination and conversion capabilities. It serves both multi-national and domestic customers in the beverage, food and home care end markets, with annual sales of approximately AU$120 billion (ZAR1.1bn).
Nampak expects to complete the acquisition, which is subject to certain conditions, in the second half of 2015.
MacKenzie commented, “This acquisition provides a platform for growth in the African region. Nampak Flexibles has an experienced management team and is the market leader in South Africa. It services many of Amcor’s existing global customers and creates the opportunity to leverage our product innovation and design capabilities into this market.”
The flexible packaging industry is worth over $200bn globally and is one of the highest growth segments of the packaging industry. Factors involved in the sector’s growth include demographic changes such as more single person households, more working mothers, more people living in cities rather than rural environments, and consumer preferences for convenience.
Africa is an emerging opportunity for the packaging industry. Its living standards are rising and domestic demand for packaging is expected to increase. Africa also produces food for export. Much of this goes to Europe and is often packaged at point of production, before it is shipped, to reduce waste.
