Nampak boss plans to ‘fix, sell or close’ 20% of sites

The fall in profits was blamed on losses in the group’s corrugated business, lower volumes across the group, the collapse of key milk bottle customer Dairy Farmers of Britain in the UK and losses at the group’s carton printing site in Leeds and at a number of smaller South African businesses.

Speaking as the results were published, Marshall, who took on the top job at Nampak in March, set out some details of how he plans to improve financial performance in the coming months.

He said that a strategic review launched when he took on the job had found that 80% of the company’s operations were profitable and that his aim was to grow these businesses.

“The remaining 20% are either loss-making or earning low returns and will be fixed, sold or closed,” he said. However, no details were revealed as to which sites or businesses would be targeted.

Marshall also said that investment would be slowed. “Capital expenditure in recent years has been very high, so we plan to reduce this to a level below our depreciation. In addition, we shall focus on the reduction of debt and costs across the group,” he said.

The group’s UK arm has recently invested in new equipment, although the size of these investments mean that they are not likely to be affected by Marshall’s comments.

Instead, the biggest recent investment projects in the group – including the construction of a paper mill at Rosslyn in South Africa, a beverage can plant in Angola and a glass cullet plant near Johannesburg in South Africa – are unlikely to be repeated.

Yesterday’s statement revealed that turnover at Nampak’s Healthcare business had grown 6% to £238m, while trading income rose from £2.5m last year to £5.5m this year – an increase that included insurance proceeds from the fire that destroyed the group’s factory at Thorpe in July 2008.

Marshall said that despite the strong performance from Nampak Healthcare, the European business had been affected by the collapse of Dairy Farmers of Britain, one of milk bottle producer Nampak Plastics’ biggest customers, in August.

Losses at the group’s Leeds carton-printing site also dragged down the performance of the European business, although the statement said that a turnaround at the plant was expected in the coming year.

NAMPAK FULL-YEAR RESULTS 2009
Year to 30 September 2009, South African Rand

Turnover R19.6bn (+6.1%)
Trading income before abnormal items R1.1bn (-26.6%)
Profit before tax R272.3m (-61%)

Click here for today’s headlines from across the packaging industry

Popular Articles