Danapak and Teich form JV

The EU competition authorities have approved the formation of a joint venture within the flexible packaging industry in Northern Europe between Danapak, Denmark and Teich Aktiengesellschaft, Austria.

Although Danapak and Teich both make flexible packaging, the Commission concluded that there was no risk that Danapak Flexibel would have a dominant position in Europe, irrespective of whether the relevant product market was considered to encompass all flexible packaging or the individual markets. The Commission concluded that Danapak Flexibel would face effective competition from strong rivals such as Amcor of Australia, Canada's Alcan and German company VAW Europack, as well as from smaller competitors.

The go ahead was given by the EU earlier this month and the plans drawn up by the two companies are now being implemented in the ramp up towards production.

With total sales exceeding £67 million (€105 million) and around 475 employees, the company will be among the largest producers of flexible packaging in Northern Europe. It is expected to have a leading position and very strong market share within several important market segments, including the dairy market.

Teich will own 60 per cent of the new company and Danapak will own 40 per cent. The new company will be named Danapak Flexibles and will have its operational headquarters in Odense, Denmark. As a consequence, the headquarters of Danapak will move from Odense to the cartons plant in nearby Korsor.

The new company is formed by merging the Danapak-owned company Danapak Flexibel and the two Teich-owned companies of Teich Flexibles in the UK and Corona Packaging in Denmark. Danapak Flexibel has further Danish factories in Slagelse and Horsens as well as sales offices and research & development in Odense. Teich Flexibles has factories in Derby, England and Dundee, Scotland. Corona Packaging has production in Ishoj.

The companies claim that the merger will make it possible to achieve significant synergies within production rationalisation, capacity utilisation, purchasing, customer service and product optimisation and development.

Previously, Teich had decided to close the factory in Derby and move the majority of production to Dundee. The decision to close the Derby facility was made known at the same time as the merger announcement.

However, part of the production will now move to Slagelse, where the primary focus in future will be in lamination, extrusion and gravure printing. Further investments and streamlining will be implemented there in order to increase capacity and reduce complexity.

The decision has also be taken to create a centre of excellence for flexo printing in the facility in Horsens. This means that part of the production from Slagelse will move to Horsens, and the company said that significant investments will be committed there. The aim is that the factory in Horsens will grow significantly, the factory in Slagelse will remain the same and the growth projections in Dundee and Ishoj will also continue unchanged.

The supervisory board will be chaired by Lord Peter Blaker of Constantia and include Stanislaus Turnauer of Constantia, Teich Group CEO Jan Homan, Teich COO Dr Gerold Riegler, Arla Foods International CEO Mikael S. Christiansen and Danapak CEO Peter Vammen.

The management of the new joint venture will consist of CEO Preben Harton (from Teich), COO Claus Koch Jensen (from Danapak) and CFO Torben Winther (from Danapak).

The new joint venture is through Teich, part of the Constantia Verpackungen group, quoted on the Vienna Stock Exchange and presently the third largest manufacturer of flexible packaging in Europe.