"The investment in Egypt marks our entry into manufacturing flexible packaging in Africa. With its rapid population growth Africa is expected to offer sizable future growth opportunities to us and our customers," says Jukka Moisio, CEO of Huhtamäki Oyj. "With the investments in India we will further improve our geographic coverage of the country and our ability to service customers in food and pharma industries. After these additions our total number of manufacturing units in India grows to 17."
New greenfield in Egypt
The new state of the art manufacturing unit in Egypt will be owned and operated as a joint venture of which Huhtamaki owns 75%. The remaining 25% is owned by Huhtamaki's Egyptian joint venture partner in Molded Fiber business since 2003, Ayman Korra. The total investment including the land purchase, the first phase of the facility construction, machinery and utilities is expected to be approx. EUR 23 million with Huhtamaki share at approx. EUR 17 million. Majority of the investment is expected to take place in 2016-2017.
Manufacturing at the facility is scheduled to begin during 2018 and the unit is expected to employ approx. 300 employees when fully operational. The unit will serve both global and local flexible packaging customers as well as export its products into other countries. Currently Huhtamaki serves flexible packaging customers in Egypt from its operations in United Arab Emirates and India.
"We're excited to expand our manufacturing network into Africa," says Olli Koponen, exec vp-Flexible Packaging business segment. "We will replicate the state of the art solutions from our newest unit in United Arab Emirates and look forward to servicing new and current customers with efficiently produced top quality flexible packaging."
Two new units and one modernization in India
To better service customers operating in North East India, a new flexible packaging manufacturing unit will be set up in the State of Assam and a label manufacturing unit in the State of Sikkim. Both units are expected to begin operations during the first half of 2017. In addition, a label manufacturing unit operating in the Greater Mumbai Region will be relocated to a new state of art facility in order to gain room for growth. The relocation to the new facility is expected to be completed by the end of 2017. The combined value of these growth investments in India is expected to be approx. EUR 9 million and they are expected to take place in 2016-2017.