The acquisition will help Huhtamaki to expand its product portfolio in China and strengthen its position in Asia (Credit: Tumisu from Pixabay)
Finnish sustainable packaging solutions provider Huhtamaki has agreed to acquire China-based Jiangsu Hihio-Art Packaging for a debt-free purchase price of €27m.
Jiangsu Hihio-Art Packaging is engaged in the manufacturing of paper bags, wraps and folding carton packaging.
It currently caters to international quick-service restaurants (QSR) and national bakery chains.
Jiangsu Hihio-Art Packaging has around 200 employees working at its production plant in Xuzhou city, Jiangsu.
Following the acquisition, the employees working at the facility will be given an option to continue working for Huhtamaki.
The privately-owned business generated annual net sales of nearly €20m last year.
The acquisition will help Huhtamaki to expand its product portfolio in China and strengthen its position in Asia.
Furthermore, it will help the Finnish company to better serve its existing and new customers in the region.
Upon closing of the acquisition, the Finnish packaging firm will have four production facilities in China – Guangzhou, Shanghai, Tianjin and Xuzhou.
Huhtamaki’s Fibre Foodservice EAO business segment president Eric Le Lay said: “I am excited with the opportunities that this acquisition represents for our core business in China.
“Urbanisation, middle-class expansion and innovation into more sustainable packaging solutions drive growth across Asia.
“The acquisition of Jiangsu Hihio-Art Packaging Co. Ltd extends our product portfolio and access to new channels. This enables us to accelerate growth in China in line with our strategy.”
Subject to certain customary closing conditions, the acquisition is expected to be completed by the end of the third quarter of 2021.
Once the acquisition is closed, the business will be reported as part of Huhtamaki’s Foodservice Europe-Asia-Oceania reporting segment.