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South Africa’s Nampak Plans $250 Million Angola Factory

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Nov. 14 (Bloomberg) -- Nampak Ltd., a South African packaging company, said it’s considering an expansion to a drinks container plant in Angola as part of program to generate more income outside its domestic market.

“As the largest packaging company in South Africa we’re constantly looking for opportunities outside of the country,” Tim Leaf-Wright, general manager of Nampak Angola unit Angolata, told reporters today in Luanda, the capital. “We’re really focusing on Nigeria and Angola at this time.”

The company plans to add a second line to a facility that opened in 2011, doubling output to 1.6 billion cans a year, according to Leaf-Wright. Warehousing space will increase by 50 percent to 33,000 square meters (355,209 square feet). Investment in the entire plant, including the existing facility, will “probably be in the region of $250 million,” he said.

Nampak’s investment follows plans by Portugal’s Sumol+Compal Angola Invest to spend 22 million euros ($29.6 million) in a bottling plant and China Investment Fund to launch a beer in Angola by March next year. Bottlers are investing prior to an increase in taxes of as much as 60 percent in January.

“Hopefully, we’ll be able to piggyback on all that,” Leaf-Wright said. “There’s also a lot of potential in other areas of packaging we’re looking at.”

Nampak, which earned 13 percent of sales from its African operations outside South Africa in the half-year through March, is seeking growth in the continent’s faster-growing economies. The company’s shares rose 2.3 percent to 30.59 rand at the close of trading in Johannesburg, snapping five days of decline.

Pedro Coelho, Angola head of Standard Bank Group Ltd., Africa’s biggest lender, said Nampak was still arranging financing for the plant and that the Johannesburg-based company was bidding to be the lead bank on the project.

“Angola is the third-largest economy in Africa,” Coelho said. “If a company wants to be in sub-Saharan Africa, it needs to be in Angola.”

To contact the reporters on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net; Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net