Aluminium packaging giant Alcan is acquiring the assets of Parkside's flexible food packaging plant in Zlotow, Poland as part of the group's strategy to develop its geographic footprint in growing and competitive economies.The company announced this week that an agreement has been reached with the UK administrators of Parkside International.
"Parkside Flexibles Poland has excellent plant infrastructure and equipment, as well as a well-trained workforce," said Christel Bories, Alcan Packaging chief executive. "This acquisition will enable us to significantly increase our capability in the attractive Central and Eastern European markets, allowing us to develop a competitive industrial base, from which to better serve our existing and new customers."
The plant employs 150 people and has state-of-the art flexoprinting capabilities with room for expansion. The amount of the transaction has not been disclosed, and this project is still subject to the approval of Polish and German anti-trust authorities.
The Polish packaged food market is forecast to rise by 14 per cent in value terms over the next five years, according to a new report by market analyst group Euromonitor. The report says strict EU membership requirements have "forced polish companies to invest heavily in improving production processes and quality standards". However, the report says a more lucrative trend for packagers will be the positive effect of Poland's EU accession on employment and disposable incomes. Euromonitor predicts both will rise, leading to faster-paced lifestyles and a 49 per cent increase in the ready meals market up to 2009.
The potential acquisition is therefore the latest example of Alcan's penetration of the eastern European packaging market. Earlier this year the company reported that it was investing $55 million to build and equip two new Russian plants.
Russia's packaging industry currently imports some $2 billion worth of foreign packaging materials and equipment annually, and increasingly needs modern packaging materials and machinery to improve the look and quality of packaging to make domestic products more competitive with imported packaged goods. Alcan's plan to start production within the country represents a clear attempt to penetrate a growing market from a domestic base.
Although Russian producers meet as much as two-thirds of demand in the overall packaging materials market, over a billion dollars worth is still imported. According to Sergey Minko, a commercial specialist with the Foreign Commercial Service at the US Embassy in Moscow, companies that sell printed materials and packaging films are most successful in this market, selling $290 million worth of materials to Russia a year.
Alcan's packaging business has been performing well of late. Recently published third quarter results showed an increase in operating profit, despite historically high raw material prices. Alcan's packaging business group profit (BGP) for the third quarter was $162 million, up $73 million from the year-ago quarter.
The division is truly global, with more than 100 operations and accounting for more than $3.5 billion in annual revenues.