Huhtamaki considering selling film business; reports higher Q2 sales

Finland-based speciality packaging group Huhtamaki's growing strategic focus on food packaging is the deciding factor for it to evaluate options regarding its films business. A potential outcome of this evaluation is divestment of the films business segment. The segment's net sales have grown well in 2014 and its financial performance is improving, says the company.

The films segment manufactures and sells films that are mainly used for technical applications in the label, adhesive tape, hygiene and health care industries, as well as building and construction, automotive, packaging and graphic arts industries. The segment serves global markets from manufacturing units in Europe, Asia, North America and South America. The net sales of the segment in 2013 were EUR187 million and it has 924 employees.

Meanwhile, for the second quarter the company reported higher net sales of EUR628 million (against EUR619 million for the second quarter in 2013), led by growth in the emerging markets of Eastern Europe and South America. CEO Jukka Moisio said, "Our organic growth this quarter was 7% against our target of 5%. Our good pace in the emerging markets continued and we achieved 12% organic growth. Given the continued economic uncertainty in many markets, I am particularly pleased that we have stayed well on our course.”

The company also acquired Positive Packaging, a flexible packaging company operating in India, United Arab Emirates and Africa, early July. “Positive Packaging is a good fit to our strategy of quality growth and emerging market positions. With Positive we are able to improve our position in India, we gain a good foothold in the Middle East and a significant improvement in Africa,” said Moisio.

He added, “The acquisition of Positive Packaging also supports our growing focus on consumer food packaging. Due to this reason we have decided to evaluate options regarding our films business. While the business is growing well and improving its profitability, it serves different end users than the other Huhtamaki businesses.”

The annual net sales of Positive Packaging are approximately EUR220 million and it employs approximately 2,500 people in India and UAE as well as in the sales offices in seven countries. Huhtamaki will acquire Positive Packaging for a debt free purchase price of EUR247 million. The business will become part of the Group's Flexible Packaging business segment. The transaction is subject to the approval of competition authorities and other regulators and it is expected to be finalised in the fall.

Huhtamaki Group’s 2013 net sales totalled EUR 2.3 billion. Foodservice and consumer goods markets are served by approximately 14,400 people in 61 manufacturing units and several sales offices in 30 countries. The parent company, Huhtamäki Oyj, has its head office in Espoo, Finland and its share is quoted on NASDAQ OMX Helsinki Ltd.


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