Newcomer Consol off to a good start
Nasreen Seria and Godfrey Mutizwa
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Bloomberg
SHARES in Consol, SA’s biggest glass maker, gained as much as 3,8% as the company spun off by consumer goods maker AVI began trading on the JSE Securities Exchange SA yesterday.
Shares of Johannesburg-based Consol started trading at R12, and rose as high as R12,45.
They were priced at R12,15 in mid-morning trading — valuing the company at R3,8bn.
AVI gave its investors 315-million Consol shares at a ratio of one for each share held. AVI stock fell as much as 47% to R13,50 and traded at R15,14.
Consol, founded 59 years ago, has four glass plants in SA, with a capacity of 600000 tons.
It has a 75% market share, with its nearest competitor being Nampak, Africa’s biggest packaging company. Consol’s plastic- packaging business has 2% market share, the company said.
The glass business had sales of R1,9bn in the six months to June last year, with the alcohol and non- alcohol beverage industries contributing R1bn. Glass sales amounted to 558000 tons in the year to June last year. The biggest customer is SA Breweries (SAB), with 36% of sales.
Consol will report its earnings results for the six months to December on Wednesday.
Consol MD Mike Arnold said he was “very excited” about the listing. He said AVI executives would stay on the board for the time being.
Arnold said the group would probably spell out its plans when it issued its final results and had reconstituted its board.
He said last year that the group wanted to position itself to support the African operations of large customers such as Coca-Cola, SAB and Diageo.
Consol would most likely take over existing packaging companies rather than build a new plant. With Larry Claasen
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