Africa’s biggest packaging company Nampak has sold its Nigerian paper packaging unit, as part of plan to shrink its portfolio and boost returns, it said on Wednesday.
Nampak said the business, which makes cartons for tobacco, food, and consumer goods industries, would be sold to privately-held Swedish cigarette pack maker AR Packaging for an undisclosed amount.
“We continue to rationalise the portfolio to improve returns on capital and reinforce our strategic intent. Proceeds from this disposal will further strengthen the company’s financial position,” Nampak Chief Executive André de Ruyter said.
Nampak has retained its aluminum and tin canning products and services in Nigeria, Africa’s biggest economy, but a country that has proven tough for some South African companies.
Telecoms group MTN has had a few clashes with regulators in Nigeria in recent years including over a disputed $2 billion tax bill and over missing the deadline to cut off unregistered SIM cards.
Other South African companies have left the country over the last five years, citing regulatory issues and under performance. They include hotels group Sun International, and retailer Woolworths and consumer food maker Tiger Brands.
Nigeria’s huge, expanding population of young people of working age, however, has made the west African country one of the top investment destinations on the continent.