South African glass packaging manufacturer Consol plans to relist on the main board of the JSE.
It was listed on the JSE until 2007, when it was taken private by a consortium of private equity investors, led by Brait Private Equity and which included Old Mutual Private Equity, Sanlam Private Equity, HarbourVest Partners and the management of Consol.
“As sub-Saharan Africa’s leading glass manufacturing and packaging company, our development plans are for aggressive growth locally and throughout the rest of the African continent,” Consol CEO Mike Arnold said on Thursday.
He added that the company believes that by combining its competitive advantage and technical ability with the company’s level of experience within the current committed leadership team, the company can open up new opportunities to create significant value for its future stakeholders.
Consol currently has operations in South Africa, Kenya and Nigeria and exports to 17 African jurisdictions in aggregate.
It is also building a new 60 000 t/y facility in Ethiopia, which is expected to be commissioned during the fourth quarter of this year.
Production will initially start at 40 000 t/y, before eventually increasing to its installed capacity of 60 000 t/y, depending on market demand.
As at December 31, 2017, the company’s total manufacturing capacity across sub-Saharan Africa included six manufacturing facilities and 13 furnaces capable of producing 932 000 t/y of glass.
“Consol’s management and technical teams, which have strong backgrounds and operational expertise in glass packaging, have consistently added value to the bottom line, while maintaining quality standards, customer relations and technical innovations.
“This has translated into significant earnings growth, established long-term supply arrangements with major customers and delivered a local operating model that has been shown to be capable of successful implementation in new operating environments,” Consol chairperson Bruce MacRobert commented.
This, he noted, bodes well for the continued growth trajectory the company’s envisages, and which the capital raised from this JSE listing will expedite.
“Our operations outside of South Africa have enabled Consol to prove its core competencies in new markets, and investigate fresh opportunities in emerging economies with no established glass manufacturing and packaging facilities, but which have an increased demand for this premium product.
“Our established long-term American and European technological contractual or business relationships provide a distinctive competitive advantage that we are looking to replicate in other growing economies,” Arnold added.
The glass packaging manufacturer is targeting to use about R2.7-billion of the net proceeds of its initial public offering to strengthen and deleverage its balance sheet. Additional listing proceeds of an amount to be determined will be used to repay a portion of the company’s shareholder loans.
The balance of the shareholder loans will be converted to equity upon listing, and the company notes that certain existing shareholders may also sell additional shares for the purpose of covering over-allotments of up to 15% of the total number of shares placed as part of the listing.
Consol’s major customers include leading beverage and food companies operating in Africa, such as Anheuser-Busch InBev, Diageo, Distell, East African Breweries, Namibia Breweries, Heineken and Tiger Brands.