Nampak Ltd. (NPK), Africa's biggest maker of beverage cans, plans to expand in Nigeria through acquisitions that may exceed its largest takeover deal to counter slowing growth in its main South African market.
Ethiopia is a target for expansion in East Africa due to its size and population of about 92 million, while Ghana is the most prominent untapped market in the west, Chief Executive Officer Andre de Ruyter, 46, said in an interview at Bloomberg's offices in Johannesburg. In South Africa, which accounts for 70 percent of sales, the strategy is to protect dominant market share and reduce costs, he said.
"The growth opportunity to take us to the next level of size can only come from Africa," De Ruyter said July 9. "There are sizable opportunities available in Nigeria. I am bullish on Ethiopia. Ghana we need to look at quite closely."
Nampak, which supplies companies from Coca-Cola Co. to SABMiller Plc, is expanding production plants in sub-Saharan Africa to benefit from a consumer market of 900 million people that spends at least 20 percent of their earnings on food and beverages, the CEO said. The Johannesburg-based company agreed to buy Alucan, a Nigerian packaging company, for 3.3 billion rand ($307 million) in its biggest ever deal last year and is studying an option to buy a plastics manufacturer in the continent's largest economy.
Companies in Africa are using the advertising potential of cans to market different products and promotions, while the growing popularity of beer is also driving growth, De Ruyter said. Nampak counters Nigerian challenges such as unreliable power supply by generating all its own electricity.