Silafrica’s Akshay Shah on Circular Packaging, MSME Support, and Sustainable Growth in Africa’s Packaging Industry

How do you quantify South Africa’s own contribution to do the EPR targets, and what milestone have you set up for next year 2026 as both regulator and also market player?


Silafrica is one of the founding members of KEPRO, the Kenya Extended Producer Responsibility Organisation. It started as a voluntary initiative. Before any regulation is established, the Kenyan government operates with a strong public-private partnership to collaborate and determine the best way for regulation to achieve a positive outcome for both the environment and the economy. This collaborative approach ensures businesses have a say in how they improve their practices without being harmed.


This process has taken several years of collaboration, voluntary activity, and development of KEPRO strategies, including creating the EPR model for different types of materials. Stakeholders for each material are brought together through what we call EPR Councils, which consider each material’s full lifecycle. For example, South Africa is part of the rigid plastics packaging category within KEPRO. The rigid plastic EPR Council includes all players in the rigid plastic value chain: recyclers, collectors, sorters, and manufacturers using recycled plastics. These stakeholders meet three to four times a year, organised by KEPRO, to have transparent conversations about the amount of material entering the environment, collected, sorted, and recycled.



This discussion provides a baseline. Typically, the average percentage of plastics collected, sorted, and recycled in the market is quite low, around 2% to 3%. If the goal is to increase this to 5% within a year or two, the EPR Council jointly agrees on the required increase in collection, sorting, and recycling capacity. We then calculate the financial support needed by companies involved in these activities. This amount is divided by the volume of plastic entering the market to determine an EPR— a fee per kilogram that packaging users pay. The funds generated support the collection, sorting, and recycling to achieve the target.



Some companies, like Silafrica, are already ahead of this target, while others have not yet started. We view the challenge at an industry level. Silafrica contributes by ensuring 36% of our total production comes from post-consumer recycled (PCR) and post-industrial recycled (PIR) materials. Additionally, we manufacture only recyclable products. We help customers transition from non-recyclable to 100% recyclable packaging, and if a customer does not make that change, we discontinue that product.



All products Silafrica supplies are 100% recyclable. When developing new products, we prioritise those that can use more recycled material, particularly secondary and tertiary packaging, which can consume higher volumes of recycled content. Primary packaging must comply with food safety standards for food, beverage, or pharmaceutical uses. However, we have a long-term roadmap to incorporate decontaminated food-safe recycled materials into primary packaging, which will take a few years.



With the right collaboration from customers, product innovation, and investment, we believe we can reach over 60% recycled content within the next five to ten years.

What technical or supply chain hurdles still limits the PCR share in your creator space and how are you working with your clients to push that percentage higher?



Beverage crates have been an area where we have led in helping customers such as Heineken, Coca-Cola, Pepsi, BeanBev, and Diageo ensure that the material used in crates remains in circulation. One challenge is that crates from some other suppliers may contain calcium carbonate or talc fillers. This should not happen, but when standards are not followed, these fillers are introduced as a way to reduce costs and increase profit. When these materials enter the supply chain, they weaken the crate structure and make recycling difficult.



A key challenge is ensuring that damaged crates or any other plastic entering the crate supply chain do not contain calcium carbonate or talc fillers. Suppliers working with these beverage companies must have a strict policy against using such fillers in any of their products. This allows companies to verify whether suppliers are purchasing these materials and confirm they are not used in crates. However, suppliers may use these fillers in other products internally, which complicates monitoring.



Another challenge is that crates become damaged through use. Working with customers to remove damaged crates from circulation requires progressive thinking. Globally, all our customers support this approach, but local execution faces logistical and equipment challenges. Some customers may lack space or face other operational constraints. We collaborate with them to overcome these barriers and ensure damaged crates are removed from circulation.

The main principle is that customers retain ownership of the material in crates they purchased, whether 10, 20 years ago, or more recently. It is essential to help customers continue to reuse this material repeatedly.



Additionally, the benefits and practices we have developed for beverage crates over the past 30 to 35 years also apply to crates in the agriculture sector, where we have observed significant growth in recent years.

Which operational KPIs will tell you that the new plant is matching the efficiency of the Kenyan or the Tanzanian side?

For our entry into Mozambique, we followed an expansion playbook developed over years of experience in Africa. Our approach to geographic expansion focuses on limiting risk while maximising upside. We maximise upside by leveraging existing customer relationships. For example, Coca-Cola knows and trusts our products in all countries where we operate. We have established ourselves as a strong innovation partner, sustainability partner, and supply chain manager. The same applies to Pepsi, Heineken, Diageo, eBay, and Inbev.



We leverage these relationships because these companies seek reliable suppliers in each country, and they trust us across Africa. As we enter a new country, we start with one or two customers and install proven equipment rather than new or untested technology.



All our equipment operates with a technology called ThinkTracks, an Internet of Things (IoT) system that provides real-time monitoring of production performance. We track cycle time, energy consumption, output, uptime, and downtime. This data allows us to benchmark performance against equivalent technology in all other countries where we operate.



This benchmarking enables us to assess whether the engineering and production teams in Mozambique meet or exceed the best performance levels elsewhere. Sometimes Mozambique may outperform others in areas such as cycle time due to having newer molds or machines. This creates an opportunity for earlier teams to learn from Mozambique. We continuously use this benchmarking process not only within individual countries but across the entire operation


 
Will Mozambique follow the same renewable energy playbook, and how does Silafrica prioritize further scope reduction version of settling or plastic credit Scheme?
Solar technology, specifically photovoltaic panels, has continuously improved in energy density. Panels installed in Kenya five years ago have much lower energy density compared to those available today. This is important because available space is limited, so maximising power output per area is critical.



Currently, Mozambique is at too early a stage for solar investment. We expect to wait one or two years to better understand the business’s expansion, particularly in production equipment, which will clarify total energy requirements. This will allow for more accurate planning of solar capacity.



Additionally, waiting has a benefit because energy density of panels improves over time. However, the main reason for waiting is uncertainty about the scale of manufacturing capacity growth in the next two years—whether it will double, triple, or quadruple manufacturing capacity.






What lessons from that private equity cycle are informing today’s capital raising strategy for recycling and circular circle economy assets?

What we take as Sumaria Group is to first of all look at the company as its own individual entity. As a company grows, it needs a different set of shareholders at each stage of growth. At the early stages, typically, private shareholders who have a higher risk appetite and are more operationally involved can take on a greenfield or a small acquisition and achieve rapid expansion. But ultimately, that kind of growth will plateau because accelerating growth requires more capital, which means bringing someone else onto the cap table.



That’s the right time to bring in private equity for accelerated growth. This accelerated growth helped the business, like in South Africa, to move much more into circular and sustainable packaging. We were doing this before Africans were a thing, but thanks to their capital, we were able to accelerate. We increased the use of recycled plastic from less than 10% to more than 36%. At the same time, the overall volume of plastic, revenue, and number of machines has increased since 2016, and we have expanded from three countries to four. So, the pie is growing bigger, and the percentage of recycled material in that bigger pie is also growing. This requires a lot of capital.



As we approach the end of 2025 and look at the next five to ten years for Silafrica, as a family, we realise that now is the time for a global strategic packaging company to be the right shareholder partner. This will unlock the next level of growth, which goes beyond sustainability. We have mastered sustainability and how to enter new African countries with low risk. But to unlock the next growth level, we need more investment in new technologies and packaging types for different sectors.



We are now focusing on the agriculture sector, helping to boost circular packaging and formalise the storage and movement of agricultural produce to reduce food waste. We’ve transformed the beverage and packaged food sectors, and now it is time to do the same for agriculture, from farm to retail. This requires a bold vision and deep pockets, which only a much bigger Silafrica can provide.



So, as I said, we look at the company to see if it is in an early stage, middle stage, disruptive growth stage, or becoming pan-African. At each stage, a different type of equity partner is needed. Now is the right time to have a strategic partner with a global packaging player.






What core message were you planning to deliver yourself to the Nairobi packaging community and how will you ensure that inside will still reach industry stakeholders?



What is special about Africa is that producers of various products, whether dairy, agriculture, beverages, manufactured goods, or furniture, include a vast number of MSMEs (micro, small, and medium enterprises), far more than anywhere else in the world. This is because Africa has over 50 different countries; it’s not one single market but more than 50 distinct markets. Each market has multiple cultures and communities, each with its own entrepreneurial energy and unique products.



This creates both an advantage and a challenge. The advantage is the abundance of unique product opportunities to bring to market. The challenge is fragmentation. There are so many small businesses, and these businesses typically struggle to access high-quality packaging at competitive prices. This is because they lack the demand volume and working capital to meet the minimum order quantities that large packaging producers like Silafrica usually require.



Large packaging producers like Silafrica have been able to invest in advanced technology to produce high-quality, sustainable packaging at competitive prices because they serve large packaging users—beverage companies, food manufacturers, personal care brands like Flora, and giants like Unilever.



However, for MSMEs, we need to provide the same quality packaging in smaller quantities while keeping prices competitive. The message to the packaging community in Kenya is: let us become more innovative in aggregating demand from multiple small packaging users. We should bring in aggregators and financial partners because these are the two areas where MSMEs face limitations.



Once orders meet our minimum production requirements, we can produce and supply efficiently. Trying to use smaller equipment or produce small runs is not cost-effective due to the laws of physics and economies of scale. Frequent start-ups, shutdowns, and changeovers add costs that make small production runs uncompetitive in price.



Therefore, we must balance providing MSMEs with competitive pricing and high-quality products. Producing small quantities compromises both quality and price. The best approach is demand aggregation combined with financial partners who provide working capital and manage collections from MSMEs.



As a large packaging producer, we are not built to deal with hundreds or thousands of MSMEs individually, so partnering with financial institutions and demand aggregation platforms is essential.







Can you highlight more on anything we have not talked about?




One success story that really highlights how we enable MSMEs is what we’ve done with yoghurt cups. The technology we’ve invested in allows us to produce millions of standardised yoghurt cups every day. What’s unique is that we can change the label on the cup in line without stopping production. This means that if an MSME wants just 50,000 cups, we can accommodate that without halting a machine that typically produces a million cups daily.



This label-changing technology enables us to offer low minimum order quantities at a competitive price while maintaining high quality and sustainability. In Africa, yoghurt cups are already benefiting from this innovation. The next step is to aggregate demand across all yoghurt producers, not just in Kenya, but throughout East Africa and bring in financial partners. This approach could help elevate the entire East African yoghurt industry to a level where East African yoghurt is recognised worldwide. The product is amazing and made by dedicated MSMEs, but often the packaging quality compromises the product. We can solve that problem with this technology.



A similar opportunity exists with fruit and vegetable exporters. Many produce high-demand products like avocados and exotic fruits such as dragon fruit, now grown in Kenya. These farmers need packaging that preserves product quality all the way through the export chain. Corrugated paper cartons are widely used but cause problems like poor ventilation that affects ripening and ultimately wastes the carton after one use. Environmentally, this is unsustainable.


Our plastic crates offer a better solution for exporting and local transport because they maintain fruit and vegetable quality better. Even better, at the end of their use, such as in supermarkets, these crates can be folded and reused. They can be aggregated and sent back to Kenya for inspection, reuse, or recycling into new crates. This cross-border circular packaging model could be a world first when fully executed.



So, here’s a message to avocado importers and European supermarkets: those empty crates sitting with you after sale can be folded and collected. We can partner with you and European aggregators to return these crates to Kenya and keep them in a circular use cycle. This kind of international cross-border circular packaging is the future, and it’s exactly where we are headed.





Do you have clients that export to Europe or other Western countries?



Yes, our avocados from Kenya regularly go to countries like Spain, the Netherlands, and many other European markets, as well as to the Middle East and Asia. For example, in Spain, large supermarkets such as Barcelona’s stores and Dia likely sell Kenyan avocados. While I haven’t personally been inside these stores, I’m confident the avocados arrive in crates made by Silafrica in South Africa.



Once the avocados are sold and the crates are empty, what happens to those crates? Supermarkets like Barcelona and Dia might reuse them for other purposes, but eventually, they will run out of alternative uses. The responsible and sustainable solution is to send these crates back to Kenya.


Supermarkets in Spain, the Netherlands, Portugal, and other countries that lead in circular economy practices should consider partnering with Silafrica to bring this circular packaging system to reality. This partnership can ensure crates are reused, recycled, and kept in a sustainable loop, benefiting both the environment and the industry.