Our strategy - plans and performance

Nampak’s strategy is to get the best out of our business over the near to medium term, and then to grow to pursue our vision, which is to provide best-in-class packaging throughout our selected markets. We measure progress against our strategy through the key performance indicators (KPIs) of our group executive committee.

Unlock further value from base business

Strategic imperative Performance in 2016
Actively manage our portfolio
  • Concluded sale and leaseback transaction, raised R1.7 billion with R1.3 billion capital profit
  • Sold stake in Sancella
  • Closed small general line DivFood business
  • Disposed of 50% share in Crown Cork Company Mozambique
Manage costs stringently
  • Concluded consultations to close Bevcan Durban
  • Achieved R126 million procurement savings
  • Reduced DivFood headcount by 180
Manage working capital prudently
  • Released R607 million from inventory and trade receivables
  • Saved R40 million through stock reduction at Plastics
  • Reduced inventory days
  • Introduced inventory management as executive KPI
  • Introduced cash management committee
Improve business performance by buying, making and selling better
  • Turned around Glass: profitable and pack-to-melt at benchmark levels
  • Launched Bevcan operations excellence project
  • Enhanced emphasis on safety, delivered LTIFR of 0.48 vs 1.2 in 2014
  • Implemented marketing excellence initiatives
  • Reduced SKUs by 30% in DivFood and Glass
  • Reduced active customer accounts by 186, improving efficiencies
Invest to compete
  • Completed phase 1 of DivFood recapitalisation
  • Optimised organisational structure
  • Commissioned Bevcan aluminium line at Rosslyn
  • Commissioned Bevcan Springs can ends plant expansion
  • Commissioned various new Plastics lines
  • Improved project evaluation and management

Accelerate growth in the Rest of Africa

Grow through greenfield investment and acquisitions in glass, metals and plastics
  • Was judicious with investments and managing risks
  • Maintained Glass in Ethiopia and Nigeria as credible opportunities
Grow at a reasonable and sustainable return
  • Moderated project pipeline because of macro-economic challenges
Grow at a reasonable and sustainable return
  • Moderated project pipeline because of macro-economic challengesPartner with major multinational customers
Grow at a reasonable and sustainable return
  • Leveraged import replacement opportunities in Zimbabwe and Nigeria

Key: Good progress Some progress Disapponting

Status Focus ahead

  • Further consolidation possible

  • Continued extraction of value and savings on total cost of ownership
  • Focus on operations excellence to drive efficiencies
  • Ensure below-inflation cash fixed cost increases

  • Further reductions in working capital
  • Further reduce stock days to 70 in South Africa and 90 in Rest of Africa
  • Streamline procurement processes
  • Ensure that cash is king
  • Increase working capital velocity

  • Drive improvements in procurement
  • Focus on efficiencies, reduction in down time and less overtime
  • Focus on reducing complexity
  • Optimise contribution margins and continue SKU rationalisation
  • Drive sales excellence for margin expansion, be data driven
  • Emphasise systematic and integrated approach to decision

  • Replace outdated equipment and consolidate sites
  • Ensure world-class project management and execution
  • Return on capital invested at benchmark rates
  • Return on growth and restructuring capex at hurdle rate and only if working capital targets are met

  • Explore feasibility of further glass opportunities
  • Bevcan growth depends on market, liquidity and exchange rate

  • Raise the hurdle rate

  • Continue to leverage strong relationships with multinationals
  • Extend technology partnerships to sustain market positions

  • Drive exports in select markets where margins are attractive
 
KPIs 2016
Among the most important in 2016 were:
  • Improve safety performance
  • Integrity and ethics management
  • Deleverage balance sheet
  • Liquidity management
  • Inventory management
  • DivFood plan implementation
  • Bevcan spoilage reduction, project execution
  • Benchmark Glass pack-to-melt ratios
  • Plastics operational excellence achievements
  • Project execution
  • Operational excellence
  • Project pipeline in place in Rest of Africa
Link to remuneration
Performance against KPIs determines a component of executives’ annual STI