Nampak’s Bevcan unit ramps up investment in plastic bottles alternatives

SOUTH AFRICA – South Africa’s packaging group, Nampak, has indicated that various innovations are being advanced to grow the pack share of beverage cans and cartons as environmentally responsible alternatives to plastic.

Amid the increase in consumer resistance to plastic, Nampak seeks to capitalise on the opportunity by replacing plastic bottles with aluminium beverage cans and paperboard cartons.

According to a Creamer News report, it is estimated that South Africans consume about 600-million plastic water bottles yearly, with most of those containers produced by the beverage firms themselves.

Bevcan South Africa, Nampak’s aluminium beverage cans production unit, is currently achieving high recycling rates, which Nampak believes is creating an opportunity to position beverage cans against plastic, particularly for water.

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Plastics bottles continue to enjoy a pricing advantage over beverage cans, but the aluminium content is higher value, making them more suitable for collection and recycling and more desirable among increasing environmentally aware consumers.

This comes at a time when several large users of packaging both locally and at a global scale have already made commitments to reducing their use of plastic.

Notably, Woolworths has publicly declared its intent to have all its packaging recyclable or reusable by 2022, while Coca Cola plans to offer 100% recyclable packaging by 2025.

Nampak is also bullish about the future prospects for cartons, noting that paper is re-emerging as a substrate of choice for liquid packaging.

“Cartons, which are made from 87% renewable sources, are eco-friendly, have recyclable rates of 66% and are cost competitive.”

Besides water, for which beverage can alternatives are already being rolled-out for some customers, the company sees significant growth potential in the wine and fruit-juice segments.

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However, Nampak said it will continue to produce plastic packaging and has no intention of selling its plastics business, as is currently the case for its glass unit, where sale negotiations are ongoing with the preferred bidder.

Instead, the packaging giant will seek to reduce the use of plastics by substituting it, where feasible, with other substrates by introducing light-weighting technology, raising the recycled content and ensure that recycling and reuse rates are as high as possible.

The JSE listed firm in its interim results for the six-month period to the end of March, reported decline in revenue by 4% to US$574.96 million, largely as a result of a decline in volumes in Angola from softer demand, and to a lesser extent the entry of two competitors to Bevcan.

Although the South African beverage can market grew by 2% in the six-month period to the end of March, Bevcan’s volumes fell 9%, as customers began allocating volumes to new entrants, including GZ Industries.

This was partly mitigated by double-digit growth in volumes by both Bevcan Nigeria and the general metals business.

The board has also decided not to resume dividends until the sustainability of cash transfers from Zimbabwe is assured and the disposal of the glass business is finalised.

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