South African packaging manufacturers Consol, Mpact expand production capacities to meet demand

SOUTH AFRICA – South African glass packaging manufacturer, Consol Glass is set to re-embark on its R1.5 billion (US$106.69m) investment in a new factory which was indefinitely put on hold last year, due to the reduction in demand for glass products driven by the Covid-19 pandemic and government’s ban on the sale of alcohol.

The glass maker has revealed that it is reviewing the decision after production and the sale of glass bottles returned to pre-Covid levels.

To this end, CEO Mike Arnold told Business Live, that the company is revisiting the investment to meet anticipated demand.

“This is based on normalisation of glass bottle market demand towards the end of last year and continuing into this year as well as a more positive outlook from our customers on consumer spending,” Arnold said.

ADVERT
MSC Cotton

Consol had commenced construction of the new plant, located in Ekurhuleni, Gauteng, targeted to add 130,000 tons of glass production to the company’s glass’s capacity.

It is expected to create 120 direct jobs, and approximately 2,600 additional employment opportunities across the value chain, from waste pickers to truck drivers, computer numerical control machine operators, glass machine operators, fitters, electricians and additional senior managers.

The expansion will require additional locally sourced raw materials including silica, lime, feldspar and cullet (recycled glass), thus supporting new investments in the mining industry.

Mpact designates R500m to expand capacity

Meanwhile another packaging manufacturer in the country, Mpact, has earmarked R500m (US$35.5m) in new investments to expand capacity to meet growing customer demand.

“To ensure we are well positioned to take advantage of a sustained increase in customer demand across our business segments, the board has recently approved over R500m (US$35.5m) in investments to support growth and innovation, improve margins, and ensure the resilience and sustainability of our operations.”

Mpact

The planned capital expenditure by the paper and plastics packaging manufacturer was revealed under its half year trading update which showed its revenue increased to R4.8 billion (US$341.4m), while underlying operating profit more than doubled to R240 million (US$17m).

ADVERT

The 16 percent increase in revenue compared with the same period last year, was partly due to the paper business benefiting from improved global containerboard prices, increased local sales and higher average prices, reports IOL.

Sales of plastic packaging products benefited from increased demand in most sectors. The company accrued more sale from the newly innovated products i.e., the “Freshpact” range of fresh produce paper trays and punnets, paper grape bags and paper courier bags.

“To ensure we are well positioned to take advantage of a sustained increase in customer demand across our business segments, the board has recently approved over R500m (US$35.5m) in investments to support growth and innovation, improve margins, and ensure the resilience and sustainability of our operations,” it said.

Over the next 24 months, the company will be building a new purpose-built facility, while investing in new technology, plants, equipment and solar power production that will improve efficiencies and expand its capacity to meet growing customer demand.

Specific growth projects include Mpact Plastic Containers’ (MPC) establishment of two new operating sites: a food-approved factory in Gauteng to grow its injection-moulded bins and crates product offering, and a facility in Brits that will house MPC’s recycling operation and increase its recycling capacity by more than 100 percent.

Mpact said it was finalising a R200m (US$14.2m) debt facility to fund the projects.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE

Other Posts Worth Reading

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.