Informalization Squeezes Nampak Margins Despite To...

Informalization Squeezes Nampak Margins Despite Tobacco Boost

Boom Can’t Mask Nampak’s Struggles

Nyashadzashe Ndoro - Chief Reporter

The rapid growth of Zimbabwe’s informal economy is piling pressure on formal manufacturers, with packaging giant Nampak Zimbabwe Limited warning that inconsistent regulation and rising compliance costs will continue to erode margins.

In its trading update for the third quarter and nine months ended June 2025, the Zimbabwe Stock Exchange–listed company said that while the macroeconomic environment remained relatively stable—helped by a steady exchange rate and a record-breaking tobacco season—the benefits were being offset by regulatory inconsistencies and high operating costs from power shortages.

Numbers at a Glance

Metric	Q3 2025 vs Q3 2024	9 Months to June 2025 vs 2024
Group Volumes	-3%	-13%
Group Revenue	—	-12%
PET/Preforms & Commercial Cartons Volumes	Down	Down
Metal Volumes	Down sharply	Down sharply
Tobacco Packaging Demand	Up in Q3	Below prior year overall

Segment Highlights

Printing & Converting

Corrugated: Flat year-on-year; the tobacco sector is slightly down due to a late start.

Commercial Cartons: +3% in Q3, driven by horticulture.

Cartons, Labels & Sacks

+34% in Q3 on tobacco paper wrap demand.

Commercial packaging: +17%.

Plastics & Metals

Mega Pak: -14% in Q3, hit by competition and Ruwa breakdowns.

Carnaud Metalbox: +8% in Q3, but overall volumes down.

HDPE volumes: +47% on strong demand.

Outlook

Paper operations are set to benefit from a larger tobacco crop, while plastics and metals are expected to recover as pricing distortions ease with continued exchange rate stability.

The group’s cautionary notice on the pending sale agreement between Nampak Southern Africa Holdings and TSL remains in place.

Nampak’s warning mirrors a wider trend in Zimbabwe: formal sector players are being squeezed between rising costs and a growing informal market that plays by different rules. For consumers, it could mean shifting product quality standards and pricing volatility as formal manufacturers try to stay competitive.