Constantia Afripack confectionery & snacks laminator to start operations in Q2 2018
The company says it invested a single-digit million euro amount in the technology at its Durban, South African-based subsidiary to increase capacity, starting operations in Q2, 2018, focusing on the confectionery and snacks market.
Web tension control system
“The Bobst Duplex laminator was shipped by Bobst as turnkey installation, and took approximately four weeks shipping and six weeks installation and training,” said Stefan Grote, EVP Food Division, Constantia Flexibles.
“Constantia acquired Afripack at the end of 2015. It has about 1,000 employees and operates six plants – four in South Africa (three in Durban, one near Johannesburg), one in Kenya (Nairobi) and one in Mauritius (Port Louis).”
The laminator has a highly sensitive web tension control system that can be maintained at extremely low tolerances for a spectrum of flexible substrates of different materials and varying thickness.
It can offer solvent-free packaging, which complements existing solvent-based and cold seal manufacturing options at Afripack.
Grote added the investment is also a sign that the South Africa economy ‘is slowly returning to old strengths’.
According to Euromonitor demand for food and drink in South Africa continued to be adversely impacted by the country’s sluggish economic performance last year. With GDP growth of less than 1%, unemployment reaching 27% and inflation rising by 6%, householders faced a decline in disposable income.
Its report; ‘South Africa: Country Profile’, March 2018, claims South Africa’s economy will pick up slightly in 2018. A rebound in agriculture and an increase in mining output provide limited support. Investment will also edge upward as business confidence improves.
'Growth market of the future'
‘Both private final consumption and exports will perform poorly in 2018. The economy is growing too slowly to ensure an increase in per capita GDP. Growth should gradually rise, reaching 2.5% per year during the next decade’.
Constantia Flexibles is strong above all in Europe (60%) and North America (25%) but wants to expand its Emerging Markets exposure (Asia 10% and Middle East/Africa 5%). Food is its largest division (60%), followed by Labels (25%) & Pharma (15%). Afripack’s portfolio covers mainly Food and Labels. Roughly 80% of the flexible packaging market in Africa is for the food segment. Constantia Flexibles is already present at its Johannesburg site, which produces labels for international drinks manufacturers. Some 100 employees work at the site.
Friedrich Humer, executive VP, Food Emerging Markets, Constantia Flexibles, said the firm acquired Afripack because ‘Africa is a growth market of the future’ and Afripack will allow the company to expand in the Sub-Saharan region.
He said consumption of flexible packaging products in Africa is forecast to continue to grow at a higher rate compared to Europe, supported by investments by multinationals, a growing middle class, expansion of organized retailing and urbanization.
Africa has a large and young population, where more than 40% of the population is under 14. It has 15% of the global population, but close to a quarter of the world’s under-14s. Between now and 2050, the population of Africa’s cities is expected to grow by almost 900 million people.
Recent public announcements of planned investments in South Africa by multinational customers of Constantia Flexibles, including Unilever, Nestle, and P&G amount to several hundred million dollars.
Afripack has strong market position with key accounts like Unilever, Mondelez, Coca Cola, and locally-based Tiger.
