Frantschach goes transAtlantic

- Last updated on GMT

Related tags: Time, Mexico

Austrian-based packaging giant the Frantschach Group has completed
yet another acquisition, this time in Mexico. The company has
acquired the sack business of paper and packaging group Copamex for
a total of $52 million, in a deal designed to complement the firm's
other recent acquisition across the Atlantic of an industrial sack
plant near Chicago, USA.

This is a significant purchase for Frantschach. The sack division of Copamex is the largest industrial sack producer in Mexico and the seventh largest sack producer worldwide. In 2002 the business produced 470 million paper sacks and generated sales of $94 million. The business consists of four production sites in Monterrey, Chihuahua, Puebla and Guadalajara.

The business has also significant exports outside Mexico. With this acquisition, Frantschach believes it has the potential to become one of the leading North American industrial sack suppliers. Frantschach intends to combine the business with its new Chicago sack plant to focus on the American market and extend its position in this market.

The industrial sack converting plant in Chicago is being bought from the Korsnäs Group in Romeoville, Illinois. At the present time the plant produces 35 million paper sacks annually and its yearly sales revenue is $ 7 million. The plant has 50 employees. Frantschach says that it wants to further increase production.

The group has steadily been increasing its exports to the USA in recent years. But the acquisition of this plant means that for the first time, the Frantschach Group can begin production in North America. The newly-formed company that will run the American facility has been named Mondi Packaging USA.

Following its deal with Frantschach, Copamex intends to focus in future on its core business tissue and corrugated packaging. Both parties have also concluded a long-term supply agreement for the off-take of sack paper from Copamex to the Mexican sack plants of Frantschach. The transaction is still subject to relevant regulatory approvals. Closing is expected in February 2004.

These two deals follow hot on the heels of Frantschach's acquisition of a sack production plant in Aberdeen, UK. The facility has been bought from a subsidiary of the British Plaster Board (BPB), which has operated the production plant under the name of Abertay Paper Sacks.The newly acquired plant in Scotland produces 85 million sacks with 130 employees, and has a turnover of approximately €38 million.

And in the summer of 2003, the Austrian group acquired a majority stake in Danish packaging company Neoplex. Frantschach believes that with the inclusion of Neoplex's Flexibles and Release division, it has the potential to dominate the Northern European flexible packaging market.

Frantschach​, a 70 per cent subsidiary of Mondi Europe, is the largest supplier of industrial sacks in the world and a leading supplier in flexible packaging and coatings. Sales last year amounted to €1.9 billion. The group represents 80 corporations in 40 countries.

Related topics: Processing & Packaging

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