Artwell Dlamini
13 October 2008
Johannesburg — A MAJOR shareholder of Nampak, which last week survived an attempt by Bidvest to buy up to 30% of it, said on Friday it now had to deal with the new challenge of finding a CE to replace John Bortolan, who leaves next year.
Nampak's future depended on who it hired as its new head, said Ian Liddle, chief investment officer at Allan Gray, which holds 27% of Nampak.
"The new CEO will have to play an important role in driving the future strategy of the company," Liddle said.
A new leader could come up with a fresh perspective that added value, he said.
Ridwan Kajee, spokesman for Oasis Asset Management, which owns 5,9% of Nampak, said he was encouraged by the management change, describing it as "positive".
The new boss will inherit a company that has a reputation for underperformance.
Nampak's trading update of September 26 prompted Bidvest, which had attempted to increase its 5% stake, to withdraw its offer to Nampak shareholders on Wednesday.
Investec Securities fund manager Peter Armitage said Bidvest realised after the update that Nampak was performing "worse than expected". Now Nampak had to improve its profitability, Armitage said.
But he said it would take time for Nampak to restore profitability, considering the tough economic conditions.
For now, the group had to make "tough calls" about shedding some of its businesses.
Nampak announced recently that it intended to exit some "noncore and underperforming businesses" within two years.
"The disposal of these businesses is expected to generate cash, increase return on net assets and significantly improve the quality of earnings," it said. Nampak has shut down 40 factories over the past five years.
The disposals formed part of Nampak's "strategic plan" to restructure its portfolio and generate value through its "substantial growth investment programme", it said.
The company has committed R1,9bn in capital investment over the next three years.
In Angola, its R1bn beverage manufacturing plant is scheduled for completion in the second half of next year. Nampak is also in the process of commissioning the R550m Rosslyn corrugated paper mill.
Nampak said its strategic review had identified operations that fitted within its longer-term vision. "Further investment will be made in these businesses where there are high barriers to entry or where Nampak has a sustainable competitive advantage."
Kajee said the packaging group had "quality assets" and stood to benefit from growth opportunities in SA and Africa.
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