Consol buyer bets big on South Africa with R1.5 billion facility expansion

Ardagh Glass Packaging (AGP) Africa – formerly Consol Glass – has announced a R1.5 billion expansion of its Nigel production facility in the south-east of Johannesburg.

The investment more than doubles the facility’s capacity to provide sustainable glass packaging and meet projected demand growth and incorporates a new furnace and production lines.

“It also provides significant energy, water efficiency and environmental benefits, representing another important step in AGP Africa’s journey to decarbonise the glass production process and reduce emissions in the communities in which it operates,” the group said.

AGP said that the capital investment will also bolster the local government’s economic recovery plans and the project will offer job opportunities in Ekurhuleni.

“The expansion has created more than 150 direct jobs and significant ancillary supply-chain expenditure,” it said.

Paul Curnow, AGP Africa’s CEO, said that the group’s investment in the local market will continue as the outlook for premium, sustainable glass packaging remains positive.

“Demand for sustainable packaging in Africa is growing strongly, supported by multiple factors, including rising income levels, growing sustainability awareness, favourable demographics and a shift to one-way packaging,” AGP said.

“We are committed to investing in our people and our asset base to enable us to serve this strong demand growth over the near term.”

Ardagh, a private company registered in Luxembourg, offered to acquire Consol in November 2021, for R10 billion. The acquisition was approved in April 2022.

The group manufactures glass packaging – such as beverage bottles and glass jars – and metal packaging products. Through its subsidiaries is also involved in the supply of glass manufacturing equipment and the sale of glass moulds.

Prior to the Consol acquisition, Ardagh did not have any glass manufacturing facility in South Africa and only exported its glass products to customers in the country.

As part of its terms and conditions for acquiring Consol, the Competition Commission required that the group invest in the construction of a new glass manufacturing facility, and favour small vendors when procuring recycled glass or cullet for use in its operations.

Other conditions include supporting SMME customers through a reduction of minimum order quantities, increasing pre-merger procurement of cullet from small vendors, and using reasonable endeavours to introduce a new production line of glass-related products in the country.

Read: Competition Commission approves R10 billion Consol Glass acqusition