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Constantia Flexibles: You just attended the onboarding event for a big group of the new employees in Durban. What was your impression?
Friedrich Humer: It was an extremely colorful and cheerful celebration. The employees seem to be excited to join Constantia Flexibles’ global network and absolutely fit our Group motto “People, Passion, Packaging!”
Of course the onboarding event in Durban was also a great opportunity not only for me but also for CEO Alexander Baumgartner as well as the Head of the Label Division, Mike Henry, to welcome the new employees and the management personally and engage in some interaction. This way, both sides got to know each other a bit better which always is a great basis for a successful start!
Constantia Flexibles: Why did you decide to buy Afripack and integrate it into the global network?
Fritz Humer: When we were looking into expanding our footprint in Africa and especially Sub-Saharan Africa, we looked at several options. Afripack always stood out as the most promising option because it is the second largest producer of flexibles packaging and labels in South Africa with 4 plants in located there and another two in Kenya and Mauritius.
They already had a strong customer base in the market we were interested in, many multinational and blue-chip companies which we partly supply in other countries already. You see, multinational customer production presence in South Africa is growing. Recent public announcements of planned investments in South Africa by multinational customers of Constantia Flexibles, including Unilever, Nestle, and P&G amount to several hundred million dollars. Afripack has strong market position with key accounts like Unilever, Mondelez, Coca Cola, as well as local champions such as Tiger and AVI.
It just seemed like the perfect match and we very much looked forward to join forces with the dedicated employees.
Constantia Flexibles: Why did you look to strengthen your footprint in the African market?
Friedrich Humer: We are entering a market with tremendous potential. The African market is a very bustling one and strong growth-numbers are expected within the next years. After all, the African continent is one of the fastest-growing markets for flexible packaging. Consumption of flexible packaging products in Africa is forecast to continue to grow at a higher rate compared to Europe. Strong growth in flexible packaging is supported by recent and expected future investments by multinationals, a growing middle class, expansion of organized retailing and urbanization.
In addition to that, Africa has a large and young population, where more than 40 percent of the population is under 14. It has 15 percent of the global population, but close to a quarter of the world’s under-14s. Between now and 2050, the population of Africa’s cities is expected to grow by almost 900 million people.
Last but not least, we already had a feeling for this exciting market as Constantia Flexibles is already located in South Africa through its Johannesburg site, which produces labels for international drinks manufacturers…so investing there was the next logical step to expand its presence in Africa in the coming years as part of its overall global growth strategy.
Constantia Flexibles: The deal was signed in July – the closing happened beginning of December. What has been accomplished so far?
Friedrich Humer: Legally we are restricted as to what we can do before closing, so we have spent a lot of time planning for the combination of our two businesses once we have closed. We have put together a very detailed integration plan and look forward to starting with this process now.
Constantia Flexibles: Looking into the future…what are going to be the next steps of the integration?
Friedrich Humer:The key next steps are really to bring the Afripack team into our Constantia Flexibles team and to then drive the business forward together. We have already had a brief kick-off meeting to introduce all the teams and define key milestones. The hard work really starts now to start bringing the benefits of this combination to all our stakeholders: not only our shareholders, but also our customers, employees, suppliers and partners. We are particularly focused on bringing our combined offering to our customers and in applying our operational know-how to Afripack.