MALAWI – Southern African plastic manufacturer Arkay Plastics has received additional investment from international private equity firm Spear Capital to facilitate its expansion in new territories through its Malawian operations.
Spear invested in Arkay Zambia and Mozambique’s operations in 2020, and despite the persistence of a COVID-19-related global economic downturn and the negative impact of geopolitics on the business environment, it has increased its investment value by 48%.
The transaction also underlines the financier’s unwavering commitment to its continued support of business founders.
The recent deal will enable Arkay to become a leading player with cross-region market dominance in Africa’s manufacturing sector, pertinent to the growth potential of fast-moving consumer goods (FMCG) companies in Southern Africa.
Chetan Kotecha the Director at Arkay says, “Spear has demonstrated its commitment to assist us with the funding addition in Malawi.
“The new capital injection will give our business a strategic financial boost to expand operations while allowing us to accelerate our sustainable plastic production.”
Arkay is regarded as the leading brand name for plastic houseware, furniture, industrial products and packaging in the operating countries, with distinct segments in retail, exports, packaging and crates.
The manufacturer carries approved supplier status with international organizations such as Carlsberg, Castle, Coca-Cola, Heineken, Plascon and AB InBev.
Spear’s drive to increase Arkay Plastics’ production capacity will enable the company to fulfill larger orders and prioritise the company’s sustainable manufacturing growth through environmental impact and waste reduction.
“Following the industry momentum for FMCG in Africa in recent years, we are thrilled to be able to add further capital to grow our investment portfolio in Arkay.
“Our investment will enable growth in sales through the development of new products and expansion of production capacity enabling the company to service existing local and export markets while strengthening ESG principles,” says Martin Soderberg, Partner at Spear Capital.
The backing in Arkay Plastics is timely as according to Market Data Forecast, the food packaging market in the Middle East and Africa is expected to jump to US$ 28.58 million by 2026.
This is a CAGR of 7.0% in the period of 2021 and 2026 and a significant rise from US$ 23.49 million in 2021.
In other related news, Ardagh Group, Luxembourg-based producer of sustainable, infinitely recyclable, metal and glass packaging entered the African market with acquisition of Consol Group, the region’s largest glass packaging maker by manufacturing capacity.
The acquisition tagged at US$1 billion including net debt assumed in Consol, represents a significant inward investment into the South African and other markets in which Consol operates, with a further ZAR 3 billion (US$200 million) investment programme in two new furnaces.
Liked this article? Subscribe to our regular email newsletters with the latest news insights from Africa and the World’s packaging and printing industry. SUBSCRIBE HERE.