Constantia Flexibles, the world’s fourth largest flexible packaging and labels company, has welcomed South Africa’s second largest packaging group, Afripack, into its global network.
Constantia Flexibles has close to R32billion (2 billion Euros) in annual sales, more than 50 plans in over 20 countries and close to 10000 employees. A truly global performer. Afripack has six plants: four in South Africa (three in Durban, one near Johannesburg), one in Kenya (Nairobi) and one in Mauritius (Port Louis) with 1150 employees in total. It achieved annual sales of roughly R1.5 billion.
Constantia Flexibles wanted to integrate Afripack into its group as quickly as possible. This is not just operational matters but also branding, corporate values, as well as health and safety standards.
Constantia Flexibles bought Afripack because Africa is a growth market of the future and Afripack offers the perfect platform to expand in the Sub-Saharan region. Constantia Flexibles was also very impressed by the strong entrepreneurial management team.
Consumption of flexible packaging products in Africa is forecast to continue to grow at a higher rate compared to Europe. Strong growth in flexible packaging is supported by recent and expected future investments by multinationals, a growing middle class, expansion of organised retailing and urbanisation.
Africa has a large and young population, where more than 40% of the population is under 14. It has 15% of the global population, but close to a quarter of the world’s under-14s. Between now and 2050, the population of Africa’s cities is expected to grow by almost 900 million people.
Constantia Flexibles is strong above all in Europe (60 percent) and North America (25 percent) but wants to expand its Emerging Markets exposure (Asia 10 percent and Middle East/Africa five percent). Food is its largest division (60 percent), followed by Labels (25 percent) and Pharma (15 percent). Afripack’s portfolio covers mainly Food and Labels.
Roughly 80 percent of the flexible packaging market in Africa is for the food segment. Constantia Flexibles is already represented at its Johannesburg site, which produces labels for international drinks manufacturers. Some 100 employees work at the site.
The global trends driving demand for flexible packaging and labels are:
- Urbanisation/trend to small families/convenience.
- Emerging middle class.
- Premium products/significance of marketing/lifestyle.
- Health/Ageing Society.
- Sustainability/reduction of material thickness/smaller carbon footprint in production.
Constantia Flexibles’ product portfolio meets these criteria and the trend is clearly moving towards flexible packaging solutions and away from rigid packaging.