Huhtamaki sells South American plastics plants
2020-04-17

Finland-based packaging manufacturer Huhtamaki is selling its South American rigid plastic consumer goods businesses to US-based Bemis for €30m, as part of ongoing plans to offload poorly performing divisions.

The acquisition includes three plants in Brazil, which mainly produce packaging for dairy, ice cream and edible fats products, and one in Argentina, which serves local foodservice markets. Bemis has acquired the common stock of the operations and will assume €1.3m in debt.

“This sale represents an excellent outcome to the review of our rigid plastic consumer goods businesses,” says Huhtamaki’s CEO Jukka Moisio, adding that he is “genuinely pleased” that Bemis has agreed to take over the plants.

Bemis subsidiary Dixie Toga will operate the Brazilian plants, while American Plast, also a division of Bemis, will take control of the Argentinean operations.

In 2008, Huhtamaki began “reviewing strategic alternatives” for its rigid plastic consumer goods operations, whose profitability was below the company’s average. These operations did not meet its targets of 15% return on investment (ROI) and 40% dividend payout ratio. Minna Steffans, head of communications at Huhtamaki, also claimed that there was overcapacity in the market, pushing down prices worldwide.

The firm later ceased all production of rigid plastic consumer goods in the UK, closing production lines in Gosport, Hampshire, and Portadown, Northern Ireland.

Moisio said this week that Huhtamaki will continue to review its remaining plastic consumer goods operations in Europe and Australia, and will concentrate its South America business on flexibles and rough moulded fibre packaging units.