Food packaging supplier ÅR Packaging has announced it will close two carton plants in Russia and Finland, affecting 150 jobs.
The Swedish company currently operates three plants in Russia and said its sales volume development does not justify having all three operational in the region at the same time as price pressure increases.
Its Moscow carton site will shut, with the group serving the Russian market from its two plants in St Petersburg and Timashevsk as they increase their production capacities.
To be competitive and profitable on the Nordic carton market, ÅR Packaging said its cost base needs to be substantially reduced and asset utilisation increased. The company has, therefore decided to shut its Kauttua production facility in Finland. Sales, customer service and product development functions will remain at the site.
The company said employees will be offered positions at other locations ‘to the utmost extent feasible’.
The news comes as the business announces a review of its operations as it targets further growth in Europe in selected business segments, global expansion with selected packaging solutions and further improved operational excellence and cost efficiency.
ÅR Packaging CEO Harald Schulz said: “ÅR Packaging has gained significant new business in targeted segments as set in our strategy. After a successful integration of the businesses acquired during latest years, we now take a holistic view on our footprint.
“Strong skill centres and further site specialisation through focused technology and know-how will increase the group’s ability to lead future developments while aligning presence to optimal locations.
“We have a vast investment programme in place which includes for example four new printing machine installations during 2016-2018 as well as expansion of our plants in Krakow, Poland, and Tabasalu, Estonia. It supports our ambitious growth plan in a very good way.”
ÅR Packaging was bought by a private investment company last year in a deal thought to be worth €500 million.
In March it signed a strategic partnership to grow its cardboard carton business in Pakistan in collaboration with Packages Limited.
© FoodBev Media Ltd 2017