Essel Propack to sell lamination unit to Amcor for Rs165 crore2 min read . Updated: 14 Jul 2015, 01:03 AM IST
Firm will sell its adhesive lamination packaging unit for Rs165 crore as part of its exit from non-core businesses
Mumbai: Essel Propack Ltd, which supplies tubes and packaging for toothpaste makers and other consumer goods firms, will sell its adhesive lamination packaging unit for ₹ 165 crore as part of its exit from non-core businesses.
The speciality packaging company on Monday said that its board of directors have approved the divestment of its wholly-owned subsidiary, Packaging India Pvt. Ltd (PIPL), to Amcor Flexibles India Pvt. Ltd for an undisclosed sum.
“The agreement to this effect has been signed and the deal completed for full cash consideration. The divestment is part of company’s strategy to exit non-core adhesive lamination packaging business and pursue growth opportunity in its core tube-packaging business which has great potential across the globe in the beauty and cosmetics, pharma and health and food categories," the company said in a statement.
Therefore, PIPL has ceased to be a subsidiary of Essel Propack with immediate effect, it said,
“The present deal will provide PIPL and its talent an opportunity to further grow and prosper in the flexible packaging space as part of Amcor, an Australia-listed global packaging company engaged in flexible and rigid packaging," it added.
“The divestment of Packaging India is in line with our strategic decision to intensify focus on the core tube-packaging business globally including India. We are noticing a significant growth in the demand of laminated tubes across categories. This decision will help us to further strengthen our expertise in tube-packaging business and deleverage," Ashok Goel, vice-chairman and managing director, Essel Propack, said on Monday.
In an interview in January, Goel had said the firm was targeting at least 50% of revenue from the non-oral segment and the company expects to achieve the target in the next two years.
Two years ago, around 12% of its revenue came from the non-oral care segment.
In the oral care packaging industry, Essel currently controls 33% of market share globally in terms of volume. It has units operating in countries including the US, Mexico, Colombia, Poland, Germany, Egypt, Russia, China, the Philippines and Indonesia, apart from India.
These facilities cater to diverse consumer goods and pharmaceutical brands, including cosmetics, personal care, pharmaceuticals, food and oral care, offering customized solutions.
The non-oral packaging products include tubes and packages for pharmaceuticals, cosmetics and toiletries.
In December 2014, Essel Propack inaugurated its fifth plant in China, with the commissioning of Essel Propack Suzhou Ltd in Suzhou for the non-oral care category. The primary focus of the China plant is beauty and cosmetic products.