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Send  Share  RSS  Twitter  29 Jun 2009

PACKAGING: Astrapak Sells Cape Wrappers


Recent Western Cape Business News

PACKAGING giant Astrapak has proposed selling Paarl-based Cape Wrappers scarcely three years after buying the specialist packaging business from Alex White Holdings.

Astrapak recently announced a “thorough review” of its portfolio of operations and target markets, which has resulted in a “redefined the future strategy for its businesses”.

As a result Astrapak will now consolidate its operations around its Films and Rigids divisions with the Flexibles division – including Cape Wrappers – being sold off.

There’s not too much detail on the proposed transaction, but Cape Wrappers – along with several other Flexibles businesses – will be sold for R153 million to Pamish Investments 46.

It is difficult to quantify the transaction value, but selling packaging investments at this low point of the economic cycle can’t exactly be considered prudent. And it seems Astrapak had invested substantially in Cape Wrappers.

In a divisional review in Astrapak’s recent annual report Flexibles boss Greg Petzer said that during 2007/8 investment in Cape Wrappers removed production bottlenecks.

Petzer said that recent investment in Cape Wrappers involved the installation of new slitters and lamination equipment – adding that internal restructuring had created a strong platform for growth in 2008/9.

So lucky Pamish Investments 46 it would seem.

CBN could not trace Pamish Investments 46, although indications are that this entity is a shell or dormant company that has been bought for the purpose of acquiring Astrapak’s Flexibles businesses.

What is disclosed is that the deal will include two properties occupied by Cape Wrappers.

Astrapak admitted that given the state-of-the-art technology in businesses like Cape Wrappers, the strong market positions and management teams, all the Flexible businesses attracted a number of interested buyers.

The good news is that the mystery buyer is acquiring Cape Wrappers as a going concern – in other words with all staff and operating assets being transferred from Astrapak to the new owner.

Astrapak noted: “The group ensured that it identified a suitable parent for the businesses and that the needs of its employees were addressed as a priority.” Astrapak also showed a great deal of confidence in the new buyer by offering Pamish Investments 46 a loan to part fund the transaction.

Cape Wrappers has been in operation for nearly 60 years, starting off as a producer of wrappers for fruit and bottles before expanding into other flexible packaging areas.

Pamish will be getting a state-of-the-art printing, laminating, extrusion coating and blown film equipment that is able to convert, laminate and print an array of flexible materials - including paper, polyester, polypropylene and aluminium. Customers include Adcock Ingram, Clover, Nestle, Kraft Foods, Tiger Brands, Unilever and Vital Health Foods.

Currently Cape Wrappers’ Paarl factory supplies packaging material to the margarine, butter, snack food, biscuit, cooking fat and pet food industries.

As recently as 2004 Cape Wrappers completed an upgrade of their Rotomec extrusion coater/laminator as well as installing a Fischer and Krecke gearless Flexpress-16s in mid-2004.

It definitely sounds like Pamish may have got itself quite a bargain.

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