Huhtamäki preparing for growth

Huhtamäki has entered into an agreement to acquire Positive Packaging, a privately owned flexible packaging company with nine manufacturing facilities in India and the UAE, as well as significant business in Africa and other export markets.

Huhtamäki will acquire Positive Packaging for a debt free purchase price of 247 million EUR (336 million USD). The business will become part of Huhtamäki’s Flexible Packaging business segment.

It said this is further evidence of its implementation of a strategy of ‘quality growth’, and strengthens its position in fast-growing emerging markets.

Huhtamäki Oyj chief executive officer Jukka Moisio said: ‘I am extremely pleased to announce this acquisition. It further enhances our position in India and provides us with much improved access to the fast-growing markets of Africa and the Middle East.

‘Many of our global customers are investing heavily to grow in these markets, and now we are even better resourced to help them grow.’

‘Together with Positive Packaging, Huhtamäki will become a leading flexible packaging provider in the fast-growing emerging markets,’ said Shashank Sinha, executive vice-president in Huhtamäki’s Flexible Packaging business segment.

‘With the acquisition we expand our flexibles manufacturing into the Middle East and double our sales in Africa with an unmatched footprint. In addition, Positive Packaging's expertise in high quality printing and cylinder making, as well as their strong focus on innovations are a perfect fit for Huhtamäki’s growth strategy.’

As a result of Huhtamäki’s growing strategic focus on food packaging, the company said it has decided to evaluate options regarding the group's Films business unit. A potential outcome of this evaluation is divestment of the films business. Its Films business unit manufactures and sells films that are mainly used for technical applications in the label, adhesive tape, hygiene and healthcare industries, as well as building and construction, automotive, packaging and graphic arts industries.

In announcing Huhtamäki’s interim results for the first half of 2014, Moisio said: ‘Our organic growth this quarter was seven percent against our target of five percent. Our good pace in the emerging markets continued and we achieved 12 percent organic growth. Given the continued economic uncertainty in many markets, I am particularly pleased that we have stayed well on our course.

‘Our pipeline of ideas and projects continues to be good in terms of new product development, bringing them to market as well as new businesses. The hard work of our acquisition team was rewarded as we were able to announce the acquisition of Positive Packaging 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.

‘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 Huhtamäki businesses.’