CCL Industries, a world leader in developing manufacturing, packaging and labelling solutions for the consumer products industry, has announced its plans to form a 51 per cent controlled European joint venture with Pachem, a leading, privately held provider of state-of-the-art pressure sensitive, shrink sleeve and in-mould labels.
The new company will operate as CCL-Pachem and will be headquartered at Pachem's existing facility in Honehems, Austria. Its focus will be on providing global consumer companies with innovative package decorating solutions for their premium European brands in the food, beverage and battery categories. CCL will continue to operate its 100 per cent owned, European label company that focuses on the personal care, pharmaceutical and chemical markets.
"The large global brand owners in the food and beverage markets increasingly look to package differentiation as a means to develop new products and gain market share," said Guenther Birkner, CEO Pachem and CEO of the new venture. "Our co-operation with a strategic player in the product decoration business like CCL gives us the financial strength and global reach to be a leader in this rapidly developing market."
CCL-Pachem will initially operate from three plants in Honehems, Austria, Avelin, France and Rhyl, UK, providing a full complement of printing capabilities with significant production capacity. Sales for 2002 are expected to exceed Cdn$ 45 million (€28.3m) and plans call for a 50 per cent expansion over the next three years.
Technology from the European operations will also be transferred to CCL Label's wholly owned subsidiaries to serve customers in North and Latin America and Asia. This includes a Cdn$ 8 million investment in its South Dakota facility that will bring CCL-Pachem technology to the United States.
Geoffrey Martin, president of CCL's Label Division, said, "We have long admired the management of Pachem and their rapid growth in the plastic container decoration business. Their expertise in the area of in-mould, off- mould and shrink sleeve systems, coupled with our pressure sensitive and heat transfer label expertise in glass bottle decoration will position us strongly in this growth area of the label industry."
CCL Industries' investment to acquire 51 per cent of the business is approximately Cdn$ 20 million including assumed debt. The Rotogravure label plant in Avelin, France, acquired earlier this year, will be part of the new joint venture. CCL and Pachem expect to close the transaction during the first quarter of 2003.
Donald Lang, President and CEO, CCL Industries, said, "this is an excellent example of a bolt-on investment for CCL Industries in a growth area of the packaging business, with products and technology we already understand, giving us a true global labeling platform for our customers."
CCL Industries provides state-of-the-art packaging solutions, including specialty aluminum and plastics packaging and innovative product labelling, to some of the world's largest producers of consumer brands. With headquarters in Toronto, Canada, CCL employs 7,000 people and operates 33 production facilities in North and Central America and Europe.