The Finnish packaging supplier made the declaration after confirming last night it had closed the deal to divest multiple rigid packing plants and sales operations to Island Acquisitions S.a.r.l for €52m. The company reached an agreement to sell to the affiliate of Sun European Partners in September but had been waiting for the approval from a number of European competition authorities before signing off on the deal.
The divested operations include rigid plastic consumer goods packaging manufacturing in Hämeenlinna, Finland; Auneau, France; Siemianowice, Poland; and Istanbul, Turkey, as well as sales units in Germany and Lithuania.
The sell off by the Finnish packaging firm is part of a long term strategy to exit the rigid packaging sector and concentrate on what its sees as its core businesses of flexible packaging, moulded fibres and food service segments.
Acquisition war-chest
Huhtamaki chief financial officer Timo Salonen told FoodProductiondaily.com the company was pleased with the deal and that it was now free to concentrate on growing both organically and through takeovers.
“In the two years since we announced our rigid packaging review we have built up considerable financial strength and freed up around €160m,” he added. ”Now we have accrued between €200-300m for takeovers across flexible packaging, moulded fibres and food service and we are currently screening acquisitions. Work began on this some time ago but we cannot predict outcomes."
The aim was to make some purchases in 2011 but the company was also planning to focus on organic growth, said the CFO.
Rigid packaging exit
The firm declared its intention to offload its rigid packaging operations in 2008 - deciding the fragmented nature of the sector combined with its non-leading market position meant profits would never match its own expectations. Since then, it has divested operations in South Africa, Australia and South America.
Yesterday’s deal leaves Huhtamaki with just one rigid packaging unit in Italy, which produces plastic plates and cups for the retail sector. Salonen said the company was still deciding on the future of this facility.
He also rejected suggestions from some parts of the market that Huhtamaki had sold its European rigid operations cheaply. In September, one analyst told FoodProductionDaily.com that he believed the company had sold the business for around a third less that its market valuation.
“We think this is the best outcome for the group. It is the best deal we had on the table,” said Salonen.