PACKAGING: Transpaco Homes In On Another Nampak Operation
Recent Western Cape Business News
GAUTENG-based packaging group Transpaco appears to be developing a bit of a penchant for Nampak’s unwanted Cape operations.
Roughly three years after (successfully) buying Nampak’s Cape-based plastics bag business Transpaco – which specialises in paper and plastic packaging solutions – announced the acquisition of Cape Town-based Disaki Cores and Tubes from Nampak for R30 million.
Disaki – which used to be known as Kohler Cores & Tubes - operates in the cardboard tubes and cores space. This entails the manufacture and distribution of board paper based angleboard, cores and tubes, cones, dividers, dufaylite, paper slitting and yarn carriers.
The deal makes sense for Transpaco, which already manufactures complementary ranges of cores and tubes. Synergies with Disaki obviously present opportunities for growth and offers economies of scale. Other than growing market shares, the deal also gives Transpaco a manufacturing and distribution presence in the Western Cape (as well as Kwa-Zulu Natal).
Gut feel is that Disaki is simply too small for the gargantuan Nampak, but for a medium sized niche packaging outfit like Transapaco, Disaki could be honed into a major profit contributor.
One of course also should remember that Transpaco has previously enjoyed success in tweaking profits from non-core Nampak operations.
At the end of 2006 a few sceptical eyebrows were raised when Transpaco acquired the retail plastic bag business of the flexibles Bellville business of Nampak Products Limited.
Transpaco has not really made a big song and dance about the plastic bags business. But one sense, from reading Transpaco’s last annual report, that the business is churning some crisp profits. According to the report, “the Cape-based retail plastic bag factory acquired in December 2006 is now achieving targeted production of locally manufactured product, eliminating imports.”
According to Transpaco CEO Phil Abelheim the achievement of production targets helped fuel a robust performance for the company’s plastics division for the year.
He adds that since the acquisition and rejuvenation of the plant the group has reinstated and created 300 jobs in the Western Cape.
Transpaco’s plastics turnover in the year to end June 2009 was R656 million (2008: R589 million) and profits came in at R58 million (2008: R28 million).
Now if Transpaco can achieve similar success with Disaki…
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