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Huhtamaki sells rigid packaging sites in Europe, continues business shift

Huhtamaki is going to sell the majority of its European rigid plastic consumer goods operations to Island Lux S.à r.l. & Partners S.C.A., shedding operations that generated approximately euro 160 million in revenue and employ 1100. For 2009, company-wide net sales came in at euro 2.037 billion. Island Lux is an affiliate of Sun European Partners LLP, the European adviser to Sun Capital Partners Inc., a U.S.-based private investment firm.

Huhtamaki is going to sell the majority of its European rigid plastic consumer goods operations to Island Lux S.à r.l. & Partners S.C.A., shedding operations that generated approximately euro 160 million in revenue and employ 1100. For 2009, company-wide net sales came in at euro 2.037 billion. Island Lux is an affiliate of Sun European Partners LLP, the European adviser to Sun Capital Partners Inc., a U.S.-based private investment firm. The sale price is euro 52 million, and the deal is subject to regulatory approval.

The affected Huhtamaki units include rigid plastic consumer goods packaging manufacturing in Hämeenlinna, Finland; Auneau, France; Siemianowice, Poland; and Istanbul, Turkey, as well as sales units in Germany and Lithuania. The divested units serve customers throughout Europe, supplying dairy, edible fats, ready meal, and ice cream packaging.

The move in Europe follows similar divestments across to globe by Huhtamaki, which has actively been divesting rigid packaging and focusing on its flexible business. On Nov. 27, 2009, Huhtamaki finalized the sale of its Australian rigid-packaging unit, Alto Manufacturing Pty Ltd., unloading manufacturing units in Bankstown, Mulgrave, and Wacol. On August 3, 2009, the company sold its rigid plastic production unit in Roodekop, South Africa, to Polyoak Packaging (Pty) Ltd. On June 3, 2009, it sold its rigid plastic consumer goods business in Brazil to Dixie Toga S.A. and in Argentina to American Plast S.A., both subsidiaries of Bemis Company Inc.

In its 2009 annual report, Huhtamaki's net sales were led by North America (25%), followed by Foodservice Europe-Asia-Oceania and flexible packaging (22% each), rigid consumer goods plastics (14%), molded fiber 10%, and films (7%).

Huhtamäki Oyj's CEO Jukka Moisio said that a strategic review of the rigid plastics business in Italy, which is currently reported under other activities, will continue. Within Europe, Huhtamaki lists operations in the Czech Republic, Estonia, Finland, France, Germany, Hungary, Italy, Lithuania, the Netherlands, Norway, Poland, Russia, Spain, Sweden, Turkey, Ukraine, and the U.K.

Huhtamaki's strategic review of its Rigid Consumer Goods Plastics segment ran throughout 2009, with the company working to separate the unit from its Foodservice business. By the end of 2009, half of the segment, in terms of net assets, had been divested, and in its 2009 annual report, Huhtamaki noted that the review of the remaining operations, including eight manufacturing units in five European countries, would continue.

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