CCL creates Europe's largest contract packaging manufacturer

Related tags Ccl Manufacturing United states

Global packaging and labelling firm CCL Industries has finalised
the agreement that will create the largest contract packaging
manufacturer in Europe.

The new venture merges CCL's custom manufacturing European operations with Portuguese firm Colep Europe. In addition, Colep has contributed its metal packaging business to the joint venture.

The new entity, named ColepCCL, will service customers from CCL's two plants located in the UK and Germany and from Colep's four plants in Portugal, Poland and two in Spain. In 2003, these combined operations had sales of over €288 million and EBITDA of over €36 million and employed 1,700 people.

CCL Industries president Donald Lang said that the new enterprise is very much a continuation of the group's strategy to create greater opportunities and growth within its core businesses, as well as provide a broader range of services.

Indeed, this is certainly not the first time that CCL has established strategic alliances with European companies - earlier this year, the group formed came to an agreement with the German-based Weener Plastik Packaging Group in which CCL was given exclusive license and distribution rights in the United States of America and Canada for Weener's entire product line.

This included plastic closures, dispensing systems, speciality PET bottles, and injection moulded plastic tubes and tube closures. Weener was given similar distribution and licensing rights in Europe for CCL's line of dispensing closures and dispensing systems.

The current arrangement with Colep Europe is therefore very much in keeping the group's global strategy, and Lang believes that the venture will be highly beneficial.

"As the largest contract manufacturer in Europe, we will be able to provide customers with the depth, location and capability required to outsource the manufacturing of their products,"​ he said.

CCL​, which is headquartered in Canada, contributed its two plants and net cash of €11.9 million for its 40 per cent interest in the joint venture. The cash component was financed from cash on hand. CCL will proportionately consolidate its 40 per cent interest in the joint venture, which is expected to be accretive to CCL's earnings in 2004.

"We are very pleased with our new partners and the response that we have received from the marketplace,"​ said Lang. "Since our initial announcement two months ago, the joint management team has identified many opportunities and synergies through their integration process which they will now be able to action."

Vitor Neves, managing director of the new venture, claimed that customer response to the new joint venture has so far been favourable. "Our goal is to take the best practices and operational know-how from both businesses and create one company that will provide increased value for our customers,"​ he said.

"This merger provides our new company with significant opportunities including access to technology, synergies, and relationships with the top marketers in Europe and North America as well as the benefit of our expanded manufacturing base."

Related topics Processing & Packaging

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