STRATEGIC PERFORMANCE

Operational review – Glass – discontinued operation

Glass – Value chain

Glass – Value chain    

OUR 2018 INPUTS, OUTPUTS AND OUTCOMES

OUR 2018 INPUTS, OUTPUTS AND OUTCOMES
 
     
     
     
 

Revenue
R1 457 million
(2017: R1 420 million)

         
   

Trading profit
R18 million 
(2017: R45 million)

         
   

Trading margin
1.2%
(2017: 3.2%)

 

Energy use
2 165 584GJ
(2017: 2 079 480GJ)

   
 

Employees
441 
(2017: 433)

   

Emissions intensity (t/CO2e/Rm revenue) 148.04
(2017: 127.45)

   

Silica sand
116 287t 
(2017: 113 965t)
(restated)

 
   

LTIFR
1.14 
(2017: 1.07)

   

Limestone
30 866t 
(2017: 32 700t)

   

Soda ash
35 815t 
(2017: 36 027t)

 
              Legend  

Nampak Glass is one of two container glass manufacturers in South Africa, and has a market share of approximately 25%. We operate three furnaces at our site southeast of Johannesburg and have installed capacity of 285 000 tonnes. Our bottles have the following share of these markets: beer: 18%; flavoured alcoholic beverages: 25%; wine: 21% and spirits: 67%.

The board has taken a decision to dispose of Nampak Glass as its financial returns have failed to meet required levels due to inadequate skills, high capital expenditure and high fixed costs.

South Africa

Performance

Inconsistent municipal electricity supply continued to challenge operations at Nampak Glass. However, the rotary uninterruptible power supply system which regulates and stabilises electricity supply functioned well, helping to mitigate these disruptions.

While volumes were broadly flat, revenue rose 3% on improved pricing in certain market segments. The business reported a small profit for the year primarily due to the ongoing manufacturing constraints and consequent inability to capitalise on sales growth opportunities.

The initiatives put in place to improve operational efficiencies are now showing results with production efficiencies and output showing significant improvements through the year. Monthly production volume rose by 11% in the second half of the year compared to the first half.

Following the board's decision to dispose of Nampak Glass, the operation is classified in Nampak's accounts as a discontinued operation. The disposal is progressing to plan.

Outlook

Should no successful disposal be concluded, in the year ahead, we expect pricing and demand to remain stable and profitability to improve as the benefits of operational interventions are realised and production efficiencies improve.

Following the ongoing examination of Furnace one's condition, a decision was made to postpone the planned rebuild of this furnace to 2020.

Glass – Value chain