Nampak continues to hold its 51.43% stake in its Zimbabwean subsidiary as an asset for sale, following the collapse of a R403.8m disposal agreement with TSL last year.

The packaging manufacturer is navigating a turbulent operating environment marked by aggressive pricing competition, market informalisation and severe energy constraints. Unreliable national electricity supplies have forced the operation to rely heavily on expensive generator power to sustain production, placing significant pressure on operating costs. Consequently, Nampak recorded a R136m impairment against the Zimbabwean unit in May.

Despite these macroeconomic headwinds, Nampak Zimbabwe reported a 9% increase in revenue to $67.8m for the nine months ending 30 June. Overall volumes strengthened by 16% compared to the same period last year, largely bolstered by substantial carryover stock from late-season tobacco case orders. However, the metal packaging division underperformed, with volumes declining significantly due to subdued market demand and raw material supply chain disruptions, while commercial carton volumes were impacted by customers moving manufacturing in-house.

Managing director JP Van Gend noted that while overall sales performance has improved, margins across all business units are being severely squeezed. He attributed this to the rising cost of raw materials and fuel, exacerbated by geopolitical volatility in the Middle East and the ongoing conflict in Ukraine.

Although the company anticipates modest volume improvements across all business units in its final quarter, profitability is expected to remain under intense pressure. Management cautioned that ongoing regional challenges, including tight local currency liquidity and shifting diaspora remittance flows, will continue to demand highly competitive market pricing.