Nampak sells glass business for R1.5 billion
The proceeds from the sale would be used to reduce Nampak's debt
Nampak, Africa’s largest diversified packaging manufacturer, has sold its glass business to Isanti Glass 1, an entity made up of a black-owned investment company and a local subsidiary of beer maker AB InBev, for about R1.5 billion.
The glass business is one of two primary glass container manufacturers in South Africa servicing beverage and food manufacturers with an estimated market share of 25 percent, Nampak said. It operates three furnaces which supply nine forming lines at its site in Gauteng, Roodekop, southeast of Johannesburg, South Africa. It also operates its own cullet sorting and processing plant on site.
Nampak has been in the glass manufacturing business since 1984.
Nampak has previously said that selling the glass business would enable it to focus on the metals business, which generates more than 60 percent of the company’s trading profit.
In its 2018 annual report, Nampak said it had decided to dispose of the glass business “because its financial returns have failed to meet required levels due to inadequate skills, high expenditure and high fixed costs”.
Nampak CEO André de Ruyter (pictured) said the proceeds from the sale would be used to reduce its debt.
In the 2018 financial year, Nampak impaired the value of the glass business by R677 million. This, according to the company, followed “a number of years of disappointing performance”.
The sale is subject to the fulfilment of various conditions and is subject to approval of the South African competition authorities.