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Jan 24, 2011

Black firm in R500m govt-backed flexible plastic packaging film expansion

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Fima CEO Patrick Munyembate tells Engineering News Online”s Martin Creamer of the company’s R500-million expansion plan to secure a larger slice of the South African market through import substitution. Cameraperson: Nicholas Boyd. Video Editor: Darlene Creamer.
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A 100% black-owned flexible plastic packaging film producer is embarking on a R500-million expansion programme to substitute imports and to capture a larger slice of the burgeoning African market.

Fima CEO Patrick Munyembate tells Engineering News Online in a video interview at the company’s two-line plant in Krugersdorp’s Chamdor industrial area that R350-million of the planned R500-million capital injection will be on a new third production line that will be larger than the combined capacity of the two existing lines.

The two existing lines, which produce 12 000 t of film a year, will focus on speciality business, while the new line, which is scheduled to be commissioned in the first quarter of 2013, will focus on commodity business.

Fima, a 180-employee company that turns over more than R300-million a year, produces biaxially oriented polypropylene (Bopp) film, which is used in an almost limitless array of flexible packaging applications.

The company obtains its polymer raw material from local producers Sasol and Safripol.

Even though Fima is South Africa’s sole Bopp producer, it satisfies only a third of what the South African market requires, with another 18 000 t/y imported, providing significant scope for import substitution.

The company is also planning to increase its exports into the African market in general and the West African market in particular.

Most of the film, which leaves the warehouse in large rolls, is sold to flexible converters like Nampak and Astrapak and then used in the snack and confectionery industries by companies including Simba, Nestle, Tiger Brands and AVI.

The company’s black economic-empowerment partner, Empowa Investments, headed by AMLive morning radio host Caesar Molebatsi, currently owns 62,5% of the company and Munyembate the remaining 37,5%.

The 100% black ownership has given the company a “huge opportunity” to expand the business with funding from South Africa’s State-owned Industrial Development Corporation and with support from the Department of Trade and Industry (DTI).

The DTI sees the potential for the creation of 10 000 more jobs in the declining South African plastics industry, which it is keen to resuscitate.

“In terms of our business, both downstream and upstream, there’s a potential to create 2 000 jobs,” Munyembate tells Engineering News Online.

Fima, which began as a subsidiary of the German-owned Treofan of Frankfurt, went through a formal disposal process in 2009, resulting in a management buyout with funding from BOE and Nedbank.
 

Edited by: Creamer Media Reporter
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