Cash-strapped South Africans are buying more tinned fish
Packaging company Nampak said that while SA consumers remain under pressure, it is benefiting from higher sales of canned fish and vegetables.
SA’s slowing economy, together with higher interest rates, fuel prices and electricity tariffs, is placing pressure on disposable income, the group said.
“This current economic climate is not expected to change before the elections to be held in May 2019.
“This rather constrained economic environment is not, however, completely negative as consumers have been resorting to trading down to value and in-house brands, as well as purchasing greater volumes of canned fish and vegetables, both of which trends have been favourable,” Nampak said.
Nigeria, meanwhile, is “well on its way to recovery”, helping the group’s Bevcan volumes in that market reach record production levels.
“The consumer is expected to remain resilient in 2019 and beyond, and Nampak is consequently investigating the viability of doubling name-plate capacity to 2-billion cans per annum [in Nigeria],” it said.
Meanwhile, Nampak said it is in talks with a black-owned company in SA regarding the sale of its glass business.
The preferred bidder, which is supported by a large multinational “with significant glass expertise”, would be responsible for its own funding.
Nampak aims to conclude an agreement by April.
The group said it would consider other asset sales to “sharpen” its focus.
Meanwhile, it said its cash balance in Zimbabwe, which is suffering a liquidity crisis, had remained relatively stable at R1.3bn.
The availability of foreign currency in Zimbabwe “remains challenging” and only R27m, or 2%, of the opening cash position was transferred from Zimbabwe in the five months to February 2019.
Imports into Zimbabwe were being funded by US dollars provided by customers.
Nampak plans to release its interim results for the six months ending March 2019 on or about May 29.