Western Cape Business News

Send  Share  RSS  Twitter  22 Sep 2009

PACKAGING: Major Cape Food Packaging Deal


Recent Western Cape Business News

In a major private equity deal, the Cape Town-based South African operations of Linpac Packaging have been acquired by incumbent management and two partners, Leaf Private Equity and Clearwater Capital. Linpac Packaging is a global group and one of Britain's biggest private companies.

The three-way deal, valued in excess of R200-million, has created a new company called Cibapac. The name reflects the company’s focus on food packaging, being derived from 'cibus', the Latin or Italian for 'food'. The deal also ensures that Cibapac is appropriately empowered through Clearwater Capital’s participation. Harish Mehta, chairman of both Clearwater and the newly formed Cibapac, says the company is a well-run operation to which Clearwater will seek to add value through its networks and industry knowledge.

Montague Gardens-based Cibapac is a well-established participant in the meat and fresh produce packaging sectors and is a market leader in several categories, including PVC stretch and cling film, plastic shrink pouches for primary meat cuts, casings for polonies and polystryene trays for both meat, fresh produce and fast foods.

Managing director, Ivan Ortlepp, describes the move as extremely positive for the local operation: 'Linpac in Europe, like many of its peers, has in these challenging times decided to consolidate its holdings and focus on its core markets. This represents a great opportunity for the South African business as it frees us up to trade beyond our past parameters, to move ahead in bringing innovation to South Africa and establish partnerships with other international players,' he says.

He notes this flexibility has never been more important than under current market conditions: 'With consumer demand fluctuating in the recession, it means that packaging vendors have to be ever more creative and innovative in finding solutions that not only reduce costs for customers but which also offer points of differentiation out in the retail marketplace.'

Ortlepp has guided Linpac South Africa through some tough times since joining the company early in 2007, including leading it through challenges from competitors and the economic downturn. 'With a core team of dedicated staff, we have overcome these challenges and enjoyed two years of positive growth,' he comments. 'We've had particular success in bringing new products to the fore and in growing our market share – and we intend to continue along this path not only through imports, but also by maximising our own outstanding production facilities that are manned by long-serving and skilled technical personnel.'

Successful product launches in the recent past have included the first local manufacture of clear plastic trays for modified atmosphere packaging (MAP) in the meat industry. This is a key trend in the sector with the use of inert gases in the packaging extending shelf life and adding shelf appeal. Additionally, the launch of clear, rigid plastic rollstock has won major market share among meat and produce packers. Future plans include offering pre-printed shrink pouches and tray lidding with customer-specific designs.

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