Company Announcement - Constantia Flexibles, the world’s fourth largest flexible packaging and labels company, is delighted to welcome South Africa’s second largest packaging group, Afripack, into its global network. Constantia Flexibles has close to 2 billion euros in annual sales, more than 50 plans in over 20 countries and close to 10,000 employees. A truly global performer. Afripack has 6 plants – 4 in South Africa (3 in Durban, 1 near Johannesburg), 1 in Kenya (Nairobi) and 1 in Mauritius (Port Louis) with 1,150 employees in total. It achieved annual sales of roughly 1.5 billion South African Rand.

The kick-off event planned for December 10 is a very important platform to welcome more than 800 Durban-based employees to our family and tell them what our company DNA is: “People, Passion, Packaging”. The fact that the CEO Alexander Baumgartner and two other Board Members Fritz Humer and Mike Henry are attending the event, shows how much the new colleagues at Afripack are valued and trusted. We want to integrate Afripack into our group as quickly as possible. This is not just operational matters but also branding, corporate values, as well as health and safety standards.

Why did we buy Afripack? Quite simple – Africa is a growth market of the future and Afripack offers the perfect platform to expand in the Sub-Saharan region. We were 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 organized retailing and urbanization. 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 5 percent). Food is our 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.

Multinational customer production presence in South Africa is growing. Recent public announcements of planned investments in South Africa by multinational customers of Constantia Flexibles, including Unilever, Nestle, and P&G amount to several hundred million dollars. Afripack has strong market position with key accounts like Unilever, Mondelez, Coca Cola, as well as local champions such as Tiger.

The global trends driving demand for flexible packaging and labels are:

• Urbanization/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.