Operational review – discontinued operation

GLASS



MANAGEMENT:
Rob Morris


Nampak Glass is one of two container glass manufacturers in South Africa and has a market share of approximately 25%. We operate three furnaces supplying nine forming lines at our site southeast of Johannesburg and have installed capacity of 285 000 tonnes. Nampak Glass also operates its own cullet sorting and processing plant.

FINANCIAL CAPITAL   HUMAN CAPITAL   NATURAL CAPITAL

Revenue

(R million)

  R1 518 million

(2018: R1 456 million)

 

Employees

  439

(2018: 441)

 

Energy use

✓ 2 143 698GJ

(2018: 2 165 584GJ)

Trading profit

(R million)

  R142 million

(2018: R18 million)

 

LTIFR

0.41

(2018: 1.14)

 

Limestone

  31 799t

(2018: 30 886t)

Trading margin

(%)

  9.4%

(2018: 1.2%)

     

Silica sand

  108 606t

(2018: 116 287t)

     

Soda ash

  34 144t

(2018: 35 815t)

     

Emissions

(t/CO2e/Rm revenue)

  134.50

(2018: 148.04)

SOUTH AFRICA

Performance

On 26 September 2019, we entered into an agreement to dispose of Nampak Glass in line with Nampak's strategic imperative to actively manage the portfolio. Operational performance during the year was flat. Inconsistent municipal electricity supply continued to challenge operations and we made interventions on the rotary uninterruptible power supply system (RUPS) to improve its reliability. Volumes edged down 2%, however, revenue rose 4% on an improved product mix and pricing.

The business reported improved profitability for the year, although this was still limited by the ongoing manufacturing constraints and the consequent inability to capitalise on opportunities for sales growth. We contained costs well, improving on 2018's performance.

OUTLOOK

While the initiatives put in place to improve operational efficiencies continue, the imminent disposal of Nampak Glass has made long-term initiatives difficult to implement. We await the approval of the competition authorities on the disposal.