GZ Industries Ltd. of Nigeria plans to expand into South Africa with the construction of a R1 billion ($71 million) factory, becoming the second beverage-can maker after Nampak Ltd. to have operations in the country.
GZI agreed to a partnership with local packaging maker Golden Era Group and will build a plant in Johannesburg with annual capacity of 1.2 billion cans, the Agbara, Nigeria-based company said in a statement. The factory will start operations in the second quarter of next year and supply other southern African countries, it said.
“This partnership with Golden Era accelerates our access to new markets across southern Africa, and consolidates our ongoing expansion efforts,” GZI Chief Executive Officer Motti Goldmintz said in the statement.
“Upon completion of the plant, GZI will have the capacity to manufacture in excess of 3.5 billion aluminium beverage cans every year.”
Can manufacturers are investing to take advantage of rising demand for canned and bottled drinks in Africa, where many consumers are switching from subsistence existences and buying packaged goods for the first time. Johannesburg-based Nampak, the continent’s largest maker of beverage cans, is also expanding with new plants in Nigeria and Ethiopia.
GZI is owned by a group of individual investors, Standard Chartered Private Equity, Verod Capital Management and Ashmore Private Equity.
“GZI is committed to its strategy of becoming sub-Saharan Africa’s largest packaging-solution provider to the beverage industry,” said GZI CEO Motti Goldmintz. GZI had successfully expanded across Nigeria, Kenya and South Africa since inception in 2006. Through its pending acquisition of Frigoglass assets, GZI also had glass manufacturing operations in Nigeria and Dubai.
“Our collaboration with GZI enables us to grow our South African operations and offer a more comprehensive range of packaging solutions to our customers, whilst leveraging the skills and footprint of one of Africa’s leading beverage can manufacturers,” said Golden Ear CEO Kishor Chhita.
“We are particularly excited about the highly skilled employment opportunities that this partnership will create, driving local development and skills transfer. This is truly a landmark opportunity, not only for Southern Africa’s beverage industry, but also to exploit our synergies in the rest of Africa,” he added.
The companies said that GZI’s West and East African footprint combined with Golden Era’s southern African presence would ensure both parties were well positioned to service sub-Saharan Africa.