JOHANNESBURG Stock Exchange (JSE)-listed packaging company, Nampak Limited, plans to merge its three investments in Zimbabwe as it consolidates its interest in the country’s packaging business.
Nampak wholly owns CarnaudMetalbox Zimbabwe, the sole supplier of metal cans. It is in a joint venture with Delta Corporation in MegaPak, a manufacturer of plastic packaging products. Nampak has 49% shareholding and the remainder is owned by Delta.
Nampak holds 38,6% shareholding in Hunyani Holdings, a paper product manufacturer.
In a notice on Tuesday, Hunyani advised shareholders of Nampak’s intention to consolidate its investments in Zimbabwe.
“Nampak Limited therefore proposes to consolidate its existing business interests in Zimbabwe through the merger of Hunyani Holdings Limited, CarnaudMetalbox Zimbabwe Limited and MegaPak Zimbabwe (Private) Limited into one business entity, to be named Nampak Zimbabwe Limited,” Hunyani said.
“The transaction is based on the acquisition of the entire issued share capital of CarnaudMetalbox Zimbabwe Limited and MegaPak Zimbabwe (Private) Limited in exchange for the issue of new shares in Hunyani Holdings Limited to both companies’ respective shareholders. The transaction will require approval from shareholders at an Extraordinary General Meeting.”
It said the requisite EGM notice and circular will be sent to the company’s shareholders in due course.
Hunyani Holdings Limited recorded a loss of $219 684 for the six months ending April 30 2014 weighed down by a decline in revenue which dipped by 9%.
In a statement accompanying the group’s results, company secretary Keith Nicholson said revenue stood at $18,9 million down from $20,9 million recorded over the same period last year.
Last month, players in the packaging products business told a Parliamentary Portfolio Committee of Industry and Commerce that the sector was under threat from cheap imports.
Mega Pak marketing director Lincoln Garwi said the company was currently operating between 66% to 70% capacity utilisation and was producing 12 000 tonnes of plastic packaging per annum.
He said the company was facing challenges of power, influx of imports and shortage of affordable lines of credit.
CarnaudMetalbox managing director John Van Gend said the company has been struggling with the food-canning business saying it was as good as dead.
“To revive the industry, government should stop imports and there is need to grow more foodstuffs in Zimbabwe to grow the canning industry,” Gend said.
He said the company has the capacity to produce about 3 million food cans per month, but the capacity is under threat from growing importation of caned products from South Africa.