Our profitability was good and we had the second best quarter in the company history although we did not break the record achieved in Q2 2016. Profitability improved in the Foodservice Europe-Asia-Oceania segment and remained at the previous year level in the Fiber Packaging segment. The North America segment's earnings were good, even if not reaching the high of the second quarter in 2016. The Flexible Packaging segment's earnings were impacted by net sales decline in India.
In 2017, we pursue our growth strategy by building new capabilities to serve our customers better in 2018 and beyond. Our project in building a new manufacturing unit in Goodyear, Arizona, the US, is proceeding as planned. We will start to ramp up manufacturing of a full range of paper packaging products to the southwest and west coast markets towards the end of 2017. In addition, we expand in China by investing in our foodservice packaging operations in South China, and by acquiring two foodservice packaging units in Shanghai and Tianjin from International Paper. Despite temporary headwinds, particularly in India, we see good growth opportunities in food and drink packaging."
Significant events during the reporting period
On March 3, 2017 Huhtamaki announced that it will set up a greenfield paper cup manufacturing unit in Kiev, Ukraine. The new unit will manufacture a full range of paper cups for cold and hot drinks. Manufacturing operations are expected to begin during 2018 and the unit is expected to employ approximately 50 employees. The unit will become part of the Foodservice Europe-Asia-Oceania business segment.
On April 21, 2017 Huhtamaki announced that it has agreed to sell one of its manufacturing facilities and the related land usage rights in Guangzhou, China, to Guangzhou Yashao Investment Co. Ltd. The sale is part of the ongoing consolidation of Huhtamaki's foodservice packaging manufacturing operations in South China. The selling price is approx. EUR 14 million. As a result of the sale, a gain of approx. EUR 6 million will be booked as an item affecting comparability (IAC) in the Foodservice Europe-Asia-Oceania business segment once the transaction is closed.
On April 25, 2017 Huhtamaki announced that is has signed a freely transferable loan agreement (Schuldschein) of EUR 117 million and USD 35 million (approx. EUR 33 million). The loan is targeted to institutional investors. It includes several floating and fixed rate tranches with maturities of 5, 7 and 10 years. Huhtamaki will use the funds for refinancing and general corporate purposes of the Group.
Outlook for 2017
The Group's trading conditions are expected to remain relatively stable during 2017. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same level as in 2016 with the majority of the investments directed to business expansion.