New Delhi: Packaging material maker Essel Propack Ltd has acquired the remaining 75.1% stake in its joint venture Essel Deutschland Germany (EDG), the company said in a statement.
Essel earlier held a 24.9% stake in the German firm, which will now become a wholly owned business. EDG, which makes laminated tubes mainly for the cosmetic and food industries across Europe, posted net sales of $40 million in fiscal 2016.
The move is expected to help Essel sell its high-decoration laminated tubes to premium non-oral care brands across Europe, including Germany, the company said.
“The acquisition of EDG will further enhance our position in the non-oral care category. This move is in keeping with our overall plans for achieving revenue growth of 15% and PAT (profit after tax) growth of 20%,” said Essel Propack managing director Ashok Goel.
“The complete buyout will enable us to step up productivity and efficiencies to those of other Essel Propack plants and improve overall profits,” M.R. Ramasamy, global chief operating officer, Essel Propack, said in the statement.
Essel Propack is part of the $2.4 billion Essel Group and manufactures laminated plastic tubes. The company caters to the beauty and cosmetics, pharma and health, and food categories globally.
Last year, it received approval from its board to divest its entire stake in Packaging India Pvt. Ltd, its flexible packaging unit, to Amcor Flexibles India Pvt. Ltd, a wholly owned subsidiary of Australian packaging products maker Amcor.
Mumbai-based Essel Propack, which has operations in the US, Mexico, Colombia, Poland, Germany, Egypt, Russia, China, the Philippines and India, is targeting 20% Ebitda (earnings before interest tax depreciation and amortization) margin, return on equity and return on capital within the next two years.
Finnish packaging company Huhtamaki Oyj in July this year acquired a 51% stake in Mumbai-based paper-cup manufacturer Valpack Solutions Pvt. Ltd. Edelweiss Private Equity, a unit of Edelweiss Financial Services Ltd invested an undisclosed amount in Freshee, a Mumbai-based manufacturer of household packaging and storage products.