Western Cape Business News

Send  Share  RSS  Twitter  21 Oct 2008

PACKAGING: Bowcalf Bucks Packaging Trend


Recent Western Cape Business News

OTTERY-based plastics packager and beverage bottler Bowler Metcalf has once again outperformed its larger packaging rivals by increasing after tax profits in the year to June by 5% to R50 million.

The gain in after tax profits was achieved despite a 5% decline in turnover to R405 million, which reinforces the long held contention that Bowcalf operations are leaner and meaner than most of its rivals.

Bowcalf has an impressive list of blue chip clients including Johnson & Johnson, Reckitt Benckiser, Alberto Culver, Distell, Sara Lee, Pfizer, Woolworths, S C Johnson, Avon and Lever Brothers.

CEO Mike Brain says the performance of Bowcalf’s core plastic operations should be seen against the backdrop of a 35% raw material price rise, debilitating power outages and over competitive pricing. He says power cuts alone cost the group R550 000.

Brain says the 7% increase in operating profit for the plastics operation was hard fought. “The industry has forced through some long overdue price increases towards the end of the period.”

Clearly Bowcalf is hoping to extend its successful operational strategy into new areas after buying up KwaZulu-Natal-based plastics convertor Gad-Tek for a nominal R2 as well as creditor claims of R2.3 million. Brain says working capital of around R8 million is needed at Gad-Tek, which he reckons will generate revenue of R20 million and make a modest profit in the year to end June 2009.

While things have gone swimmingly in the plastics packaging side, the group’s filling operations in Quality Beverages took a bit of a smack.

After some strong results in the year to end 2007, Q-Bev reported an 89% drop in profits to just R700 000 with revenue falling R35 million short of budget.

Brain says Q-Bev was ‘severely hit’ by the unavailability of CO2 in the peak summer months – which also meant the planned expansion into Gauteng and Mpumalanga was put on hold.

Q-Bev, which has its biggest niche in the Western Cape, produces Dixie Cola, California and Jive carbonated soft drinks as well as a range of cordials and mineral waters (Aqua Blue). Q-Bev was started by Cape Town-based entrepreneur Sharief Parker in the mid-nineties. Bowcalf gradually built a controlling stake in the company, positioning Q-Bev as a second tier supplier in the group.

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