JSE-listed Africa’s largest diversified packaging manufacturer Nampak has entered into a definitive agreement with AR Packaging Group for the disposal of its subsidiary Nampak Cartons Nigeria for an undisclosed amount.

Nampak chief executive André de Ruyter said the disposal of the Cartons business in Nigeria was in line with Nampak’s ongoing strategy to sharpen its focus on strategic underlying businesses. “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,” De Ruyter said.

Nampak, which has footprints in eleven African countries, said the disposal was subject to customary closing conditions, including local regulatory approvals.

“The parties to the transaction have agreed that no financial details will be disclosed,” the group said.

Nampak Cartons Nigeria is a producer of high quality folding carton products for the tobacco, food and consumer goods segments.

The group said Nampak Cartons Nigeria served a broad market of primarily multinational customers in the tobacco and food segments from its production facility in Ibadan, Oyo State, Nigeria, and the company employed 200 people after having been established in 2004 by a subsidiary of Nampak.

In the update the company said that the macroeconomic environment in South African gross domestic product slowed down to 0.8percent in 2018, even though the last two quarters in 2018 had positive growth.

Its continuing operations in the metals division in the South African beverage can market was growing at low, single digits, while in Nigeria volumes grew ahead of expectations and the devaluation of the kwanza had led to softer demand in the short term in Angola.

In February Nampak informed shareholders that it has decided to dispose of its glass business and it had been in exclusive negotiations with a preferred bidder in respect of the potential disposal. The company aimed to conclude a purchase agreement and sale by this month.

However, the group stated that the preferred bidder was a black-owned South African company.

Nampak shares closed 2.52percent lower at R11.21 on the JSE yesterday.