Finnish food and drink packaging specialist Huhtamaki has completed the sale of its vacated manufacturing unit and related land usage rights in Guangzhou, China.
The facility has been divested to Guangzhou Yashao Investment for approximately €14m.
The sale of the Guangzhou production unit supports the company’s aim to consolidate its foodservice packaging manufacturing operations in South China.
As part of the consolidation, Huhtamaki has also closed down its Shandong manufacturing facility, thereby impacting 200 jobs.
The products that are manufactured in Shandong will be sourced externally in the future.
As a result of the sale, Huhtamaki has booked approximately €3m as items affecting comparability (IAC) in the Foodservice Europe-Asia-Oceania business segment in the fourth quarter of last year.
With an aim to gain synergies, the packaging specialist intends to consolidate its recently purchased International Paper’s (IP) foodservice packaging operations in China, which comprises production units in Tianjin and Shanghai, into one unit in Tianjin.
With the consolidation, all manufacturing operations will be transferred to the facility acquired from IP and are expected to be completed by the end of the first quarter of this year.
In China, Huhtamaki currently operates a total of three focused foodservice manufacturing facilities in Guangzhou, Shanghai and Tianjin.
Last November, the company invested approximately €11m to develop a new manufacturing facility in Hämeenlinna, Finland.
While the construction work on the project is slated to begin this year, the new unit is expected to begin operations next year.