Nampak facing 'operational difficulties', 'significant challenges'

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In a strategic update, Nampak CEO André de Ruyter says it continues to navigate volatile macroeconomic conditions prevailing in a number of its key markets in this financial year.

Locally, Nampak has experienced operational difficulties at its glass and Bevcan Springs factories, De Ruyter says.

In Africa, Nampak says its businesses continue to operate in a challenging macroeconomic environment and contractual pass through mechanisms are in place to protect the businesses from currency fluctuation where possible.

"Forex liquidity is a concern in Nigeria and Angola and will impact 2015 results," De Ruyter says.

Nampak indicates that all is not doom and gloom.

De Ruyter says the group has made solid progress on stabilising and improving the performance at its glass factory and is addressing the spoilage issue at its Bevcan Springs site.

"We anticipate the benefits to translate into strong financial performance in 2016 off the 2015 base, based on currently known factors," he adds.

Even in Africa, Nampak is pressing on with its expansion plan.

"Despite the current significant challenges in the region caused by the decline in commodity prices, our expansion into attractive sub-Saharan African markets will continue. With the region's economy still growing above global rates, and a growing, young and rapidly urbanising population, we along with key customer partners, continue to invest to meet rising consumer demand in these higher-margin markets," De Ruyter says.

"The demographic case for further growth in African consumer markets remains compelling and Nampak is uniquely positioned to capture these opportunities," he says.

Operationally, Nampak aims to return to core excellence as a high-performance manufacturer, by focusing on operational leverage across divisions.

"By focusing on efficiencies we are removing unproductive costs from the system, as illustrated by our new head office which has reduced its office space by 75% and its headcount by 48%," De Ruyter says.