It said it planned to take advantage of growing demand for packaged consumer goods and bottled drinks in the two countries where a quarter of Africans live.
The Johannesburg, South Africa-based company has reached a preliminary agreement with a partner for a factory in Ethiopia and is now seeking financing for a project with a potential cost of $68 million.
Nampak's Chief Executive Officer Andre de Ruyter said in an interview at Bloomberg’s Johannesburg office that the Ethiopia site it will help supply drinks makers including brewer Heineken and soft drinks producer Coca-Cola.
Nampak has signed a memorandum of understanding with a local partner in Nigeria, identified a factory site with access to natural gas and water and started a feasibility study, Mr de Ruyter said. The plant in Africa’s largest economy will cost $100m and be completed in about three years.
The company also has plans for an Angolan glass factory although it is still ‘very early days’, the CEO said.
“Africa is the story for us,” De Ruyter said. “People talk about Latin America, they talk about India, China or other emerging markets, but we think the opportunity that we’ve got in Africa is so big and this is what we know we can do well.”
Many people in the sub-Saharan region are moving away from subsistence existences and becoming consumers of packaged goods for the first time, according to De Ruyter, creating a growing market for can and bottle manufacturers. Nampak is also the continent’s largest maker of beverage cans.
“There’s a youth bulge of people reaching drinking age,” in Africa, De Ruyter said. Producing glass bottles and cans “makes a lot of sense.”
Nigeria, with a population of about 177 million, has 44% of its population under the age of 15 while 46% of Ethiopia’s 97 million people are below that age, according to U.S. Census Bureau data. That compares with 16% of the 403 million people who live in the euro area.