The business, which will operate under the name of Schoeller Arca Systems, will be based in the Netherlands. Both companies are confident that the move will complement each other's expertise.
The integration of the two businesses comes at a time when there is a discernible global trend towards supply chain integration. Returnable plastic packaging has the potential to make this easier and more efficient, simultaneously saving and recovering resources.
In addition, there is growing awareness that plastic packaging is a major contributor of waste. To give one example, somewhere between 500 billion and a trillion plastic bags are consumed worldwide each year, and of those, millions end up in the litter stream outside of landfills.
Indeed, it has become such an environmental nuisance that countries such as Ireland, Taiwan and Australia have heavily taxed the totes or banned their use outright. Several other regions of the world are considering similar actions.
Both Schoeller Wavin and Arca are market leaders in plastic returnable packaging manufacturing. Schoeller Wavin leads the European crate and tray market for the beverage industry and pooling companies, while Arca holds a similar position in plastic returnable packaging used in a variety of industries.
The two companies have more than 30 production and sales operations in practically all European countries and on the American continent, with hardly any overlap. Their total turnover in 2004 will amount to approximately €520 million and together they have a staff of about 1,750.
"We are now making a tremendous step forward," said Schoeller Wavin's CEO René Wolfkamp, who will also become CEO of Schoeller Arca Systems.
"For years both parties had their strategies aimed at broadening their product and market base.
"By joining forces we succeed in doing so in just one step, simultaneously becoming the number one in the world."
In addition Wolfkamp believes there are excellent opportunities for further expansion. "The global market for returnable plastic containers grows by 4 to 6 per cent per annum due to the huge advantages over traditional materials like wood, steel and cardboard. Through our creativity and innovation in the development of cost saving solutions, we will surely be able to capitalise on various market opportunities. Apart from Europe our ambitions are also aimed at the United States and Asia."
Arca's CEO Wiking Henricsson will take on a position as vice chairman of the new company's supervisory board. He is equally pleased with the merger.
"I am sure this will be a benefit for all involved: customers, employees and shareholders. In a world of increased consolidation and globalisation, our industry has remained rather fragmented.
"Global companies like beverage producers, pool organisations and the automotive industry have an increasing need of global sourcing. We can now meet these demands and create global leadership, built on the platform both companies have successfully developed over the years. Offering our customers joint expertise, expanded R&D capacity and a worldwide network."