Flexible packaging facility
Alcan Packaging, a subsidiary of Rio Tinto Alcan, completed the construction of its new state-of-the-art flexible packaging facility in Novy Bydzov, Czech Republic in December 2009. Production trials then began at the new facility.
The packaging facility was built at a total cost of €17m ($27m). Alcan announced its plans to construct the new facility in July 2008, with the groundbreaking ceremony held in October 2008. Planning and execution of the new plant was carried out at a swift pace and the construction of the plant was completed in just 17 months.
This facility is now part of Amcor Europe operations after the acquisition of Alcan Europe operations in March 2010. The new plant is Alcan’s fourth plant in Eastern Europe.
The new facility mainly concentrates on the manufacture of high-quality rotogravure flexible packaging. Equipment installed at the plant include three rotogravure presses printing in seven colours, inline lamination and cold sealing equipment.
The plant provides packaging products to emerging markets such as Germany, Central and Eastern Europe (CEE) and the Nordic region.
The new plant is benefiting from Alcan’s web of Best Practice Transfer teams as well as its Lean Six Sigma programme.
Financing for Alcan’s new facility
Alcan’s new facility was constructed with active backing from CzechInvest, a government business development agency. In the past few years, the Czech Republic has been attracting huge foreign direct investments.
The main reasons for this are the central location of the Czech Republic in Europe and the availability of skilled and technically trained workforce.
The Czech Republic is also the first post-Communist country to have been given an investment-grade credit rating by international credit institutions. CzechInvest has, therefore, been actively involved in promoting investments in the region. It provides services and development schemes to attract foreign investment and to develop companies in the Czech Republic.
Novy Bydzov plant contractors
Buderus Litinové Systémy, a distributor of cast pipe systems for residential and commercial applications, was contracted to install the safety equipment at the new plant. The safety equipment included a fire extinguishing system.
Installation of the system required 8.8m of ductile cast iron pipes of the DN 100, DN 00 and DN 50 nominal sizes which were supplied by Buderus. The pipes were installed using the highly reliable VRS- T/BLS joint.
Benefits of new Alcan plant
Several companies including Amcor invested in the central European packaging market due to the attractive growth opportunity provided by the market. The new plant will help Amcor expand its market in the Czech Republic and also provide its customers with high-quality products.
Alcan already had a solid presence in Western Europe and the construction of the new plant and its acquisition will strengthen Amcor’s position in the growth markets of CEE.
Rio Tinto put Alcan’s packaging business up for sale after it bought the Alcan Group in 2007.
In July 2009, Australian packaging company Amcor made an offer of $2.025bn to acquire the packaging business of Alcan. Amcor expects Alcan’s packaging business to substantiate Amcor’s existing business in higher growth markets.
In December 2009 Rio Tinto accepted the offer, although the deal was yet to be approved by the European Union. Amcor, however, stated that it was willing to sell its own flexible packaging units to address any anti-trust concerns.
The deal materialised in February 2010, for $1,948m. Amcor acquired Alcan Packaging Global Pharmaceuticals, Global Tobacco, Food Europe and Food Asia. The deal excludes the sale of Medical Flexible Business for $65m which is deferred for time being. The sale of this unit is subject to market review by the US Department of Justice.
Alcan Packaging Food Americas has also been taken over by the US based Bemis Company Inc. The sale took place in March 2010 for $1.2bn. Bemis had to divest two flexible packing operations to acquire Alcan as per the guidelines issued by the US Department of Justice.