From Creamer Media in Johannesburg, this is the Real Economy Report.
Sashnee Moodley:
Packaging company Nampak invited media to its glass manufacturing facility earlier this month to highlight its improved operational efficiencies, which has taken its glass business from red to black in recent months.
David Oliveira tells us more.
David Oliveira:
Despite reporting a R76-million loss for its glass business in 2015 packaging company Nampak has, since July last year, recorded seven consecutive profitable months, owing to improved sales and operational planning processes, key operational excellence interventions, thereby leading to greater operational efficiencies.
Nampak CEO André de Ruyter told media at a visit of the company’s glass manufacturing facilities in Germiston that the glass division had been losing money following the commissioning of the third furnace in 2014, prompting Nampak to overhauling significant elements of the operation, including the divisional leadership team.
Nampak MD Pieter van den Berg, who joined the glass business in September 2014, has more.
Nampak MD Pieter van den Berg:
David Oliveira:
He added that through a number of initiatives aimed at improving operational efficiencies the division has reduced its monthly glass manufacturing breakeven point materially depending on the product mix and campaign build parameters
To help improve the company’s glass manufacturing capacity the company invested R1.2-billion into a 400 t furnace, Furnace 3, which has increased Nampak Glass’ manufacturing capacity by 56%.
The new furnace was commissioned in late 2014, which Van den Berg highlights was a trying time for the division owing to manufacturing disruptions.
“Furnace testing and corrective interventions were on-going and forming equipment installed on the new furnace showed severe capability constraints further compromising manufacturing and output capability. These had to be replaced with proven alternatives,” Van den Berg explains.
Nampak currently operates three furnaces, each with three forming lines with double-gob and triple-gob capabilities. Triple-gob capability has allowed the division to increase output on a forming line in excess of 500 000 units a day.
Gob refers to the molten glass before it is formed into a glass product.
Nampak Glass’ current manufacturing capacity is 285 000 tons/y.
Pieter van den Berg:
David Oliveira:
The strategies employed by the company have significantly improved its pack to melt (PTM) rate from record lows of between 40% and 50% in 2014 to exceeding 85% currently.
Pack to melt refers to the amount of glass placed on a pallet relative to the amount of raw materials that have been melted. The higher the pack to melt the greater the efficiency.
De Ruyter noted that the company was able to make the turn to profitability by focusing on the right strategies and manufacturing philosophy, focusing on operational excellence, safety and discipline.
Pieter van den Berg:
Sashnee Moodley:
That’s Creamer Media’s Real Economy Report. Join us again next week for more news and insight into South Africa’s real economy.