Packaging giant Astrapak, currently in the throes of a turnaround strategy under new CEO Robin Moore, has sold off Hilfort Plastics Cape Town to Boxmore Plastics.
Stikland-based Hilfort specialises in the production of singlestage injection stretch blow-moulded PET (polyethylene terephthalate) containers (bottles and jars) mainly for food and beverage applications. This should complement Boxmore’s packaging offering that services the soft drink and liquor sector with bottles, closures and pre-forms. This is the second Cape-based packaging operation that Astrapak has disposed in the last five years. In mid-2009 the company sold Paarl-based Cape Wrappers as part of a “thorough review” of its portfolio of operations and target markets. No price tag was disclosed for the transaction, but CBN suspects Boxmore did not have to pay anything like a premium price for Hilfort.
There is a hint of desperation in Astrapak’s rationale for selling Hilfort. Astrapak argued the PET market remained highly competitive – noting rather ominously “the fundamentals continue changing rapidly and to remain sustainable the single most important factor is operational scale.” Astrapak said the trend of customers moving in-house to blow their own bottles and consolidating filling facilities continued to further reduce the scope of volume available to converters. The company said this trend was more pronounced in the Western Cape where the PET industry was relatively small in relation to the Gauteng region. The bottom line is that this has meant Hilfort Cape Town had been impacted significantly by these factors and had underperformed relative to Astrapak’s other Rigid operations for some time. Astrapak said the transaction would ensure continuity of supply to the customer base in the Western Cape region and would allow Boxmore to consolidate Hilfort into their Western Cape operation.
This, obviously, would mean enhancing and securing scale and the sustainability of Boxmore’s own PET operation in the region. Meanwhile the rumour mill is also working overtime around pending changes at another Cape-based plastics packaging company Bowler Metcalf, which also has substantial PET operation. Bowler has been trading for some months under a cautionary notice that warns shareholders that important negotiations are underway.
The whispers around Ottery – where Bowler has its head office – suggest the company could be looking at a deal for its soft-drink filling operation, Quality Beverages (QB.) While QB has cornered a significant niche in the Western Cape with its popular Jive brand, the push into the competitive Gauteng market has proved difficult (and costly.) A possible outcome of on-going deliberations might see Bowler either selling its operations to a larger player in the beverages market, or looking for a joint venture arrangement with a bigger partner. The names of Clover, the dairy brand distributor, as well as Ceres Beverages – which is controlled by Pioneer Foods – have been cited.