Intellectual capital

Innovation in the design and functionality of packaging is an important competitive advantage. Our R&D facility in Cape Town is staffed by highly qualified scientists, engineers and technicians who assist in ensuring that Nampak provides customers with world-class packaging solutions. This facility has been in operation for over 70 years and is unique in Africa. Our brand, promising “Nampak Packaging Excellence”, provides customers with the confidence that they will receive the desired level of quality and service. Our operations excellence initiative and ongoing investment in modern technology ensures that we adapt to the changing needs of the market.

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Trade-offs in our use of intellectual capital

Our investment in intellectual capital reduces our financial capital in the short term but increases our human, manufactured, financial, social and relationship and natural capitals in the longer term.

Key inputs

  • Experience, skills, competencies of all our employees established over numerous years
  • At least 23 scientists, two engineers, 10 technologists, three technicians and four business information researchers at our R&D facility
  • An R&D budget of R44 million
  • Our operational excellence initiative, other business processes and management systems
  • Technical association and agreements with several global packaging companies
  • A programme to restructure our central IT infrastructure

OUTCOMES

  • Delivery of robust operating, financial and human resource practices
  • Manufacture of more convenient products with improved performance
  • More consistent and stable production in our metals operations
  • Reduction in the amount of edge trimming of tinplate coil
  • Appropriate coating technology to comply with EU legislation
  • Better customer relationships
  • Light-weighting of plastic packaging and down-gauging on metal substrates used in can making
  • A new, reliable computing storage IT infrastructure
  • New configured servers, new disaster recovery facility
  • Updated business intelligence platform

How we achieved these outcomes

  • Trialled, evaluated and approved new tinplate raw materials
  • Evaluated new generation BPA-NI coatings for food and beverage cans
  • Reduced raw material requirements for plastic bottles by up to 10%
  • Assisted customers with advice on how best to package their products
  • Continued to provide bursaries to develop our intellectual capacity
  • Followed an established programme methodology for restructure of IT infrastructure
  • Tested new IT solutions thoroughly
   

INTELLECTUAL CAPITAL FOCUS: R&D – CENTRAL TO OUR STRATEGIC DELIVERY

     
   

Nampak R&D is key to our competitive advantage. Over 70 years, it has provided Nampak and our customers with scientific and technical expertise in the development, production and use of world-class packaging. In 2017, we looked to take better advantage of this key strategic capability, particularly regarding the assessment of new raw materials and achieving process enhancements. We worked to better integrate R&D’s capability within the business, and increase its interface with Nampak businesses in the Rest of Africa.

   

OUR 2017 HIGHLIGHTS

In Metals, we trialled, evaluated and approved new tinplate grade materials that have improved ageing characteristics thanks to changes made to the chemical composition of the alloy. This enabled the manufacturing sites of DivFood and the Rest of Africa general metal packaging business to achieve more consistent and stable production, even when the metal aged.

By working closely with our local and international suppliers, we were able to reduce the edge trimming of tinplate coil. This resulted in less waste by our suppliers and hence lower input costs for Nampak.

For the production of metal paint pails, we identified, trialled and evaluated the use of soft ultra-low carbon steel. This very flexible steel, which we adopted, allowed us to follow a more consistent manufacturing process when producing paint pails.

For Bevcan in South Africa, Angola and Nigeria, we trialled and qualified three new international aluminium can body stock suppliers. This was to mitigate the risk of dependence on limited suppliers and ensure a continuous supply of raw materials should there ever be a delay in supply from one supplier. Driven to mitigate this risk, we also started qualifying additional suppliers of pre-coated can end stock.

We continued our work carried out over many years on BPA-NI (Bisphenol-A not intentionally added) internal lacquers. We focused on ensuring that Nampak has the appropriate coating technology available to comply with upcoming EU legislation, particularly for those customers who export their canned products to Europe. Working closely with international coating suppliers, we trialled numerous new BPA-NI coatings for use in aluminium beverage cans and tinplate food cans, undertaking pack tests to determine which coatings are most suitable to package various different foods. This is to mitigate the risk related to not being able to retain customers.

We continued to target process improvements, including work on optimising our coating equipment. One such project involves endeavouring to increase the speed of our manufacturing line and so increase our capacity. By sending more coated sheets through the oven at the same time, we would require less energy while still delivering a functional coated sheet.

In Plastics, in the year we continued to reduce incrementally our usage of raw materials for various packaging formats while ensuring that the new designs and lighter containers continue to perform satisfactorily. In recent years we have reduced the weight of the 2 litre HDPE milk bottle from 42g to 38g. We continue to work on other lightweighting projects for bottles and crates.

In addition to facilitating the manufacture of crates made of 100% recycled material and those made of 100% virgin material, we introduced an option of using 60% recycled and 40% virgin material. Crates made of 100% virgin material are stronger than those made of 100% recycled material. The new option gives a blend of recycled and virgin material with almost the same strength as virgin crates, but at a lower cost. It also gives our businesses in the Rest of Africa flexibility to produce crates when supplies of raw materials are insufficient to make 100% virgin crates. In the year we also reduced the weight of a bread crate made of recycled material from 1 320g to 1 300g with the help of finite element analysis. Subsequent testing showed that the new lighter design had an improved top load strength.