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Huhtamaki, Smith Anderson to form JV to manufacture foodservice paper bags

Finnish food packaging specialist Huhtamaki has collaborated with Smith Anderson Group to create a joint venture (JV) for manufacturing paper bags in Eastern Europe.

Expected to begin operations in the first quarter of this year, the JV It will produce paper bags at Huhtamaki's facility in Czeladz, Poland.

At present, Huhtamaki is producing paper bags in Russia only, and the move will help the firm to serve more foodservice customers.

Huhtamaki said that it will consolidate the JV firm as a subsidiary in the group's financial reporting as the majority shareholder.

The business will be operated as part of the firm’s foodservice Europe-Asia-Oceania business segment.

In December 2017, Huhtamaki completed the sale of manufacturing facility and related land usage rights in Guangzhou, China to Guangzhou Yashao Investment for €14m.

The sale of vacated manufacturing facility is part of Huhtamaki's consolidation of foodservice packaging manufacturing operations in South China, in a bid to further improve its competitiveness in the country.

In September last year, Huhtamaki completed the purchase of International Paper's foodservice packaging operations in China.

The divested business has two facilities in Shanghai and Tianjin and a workforce of about 200 employees.

As of 2016, the net sales of the acquired foodservice packaging units was reported to be around €19m.

Huhtamaki is involved in developing and manufacturing packaging for food and drink industry. It has 78 manufacturing units located across 34 countries.

The company has around 17,600 employees and generated net sales of €2.9bn in 2016.