SIG Combibloc has unveiled plans to invest €90m in a giant packaging plant in Brazil as it seeks to tap into an explosion in demand for aseptic carton packs in South America over the next few years.
The company said work is already under way on the first stage of the facility in Campo Largo, in the southern state of Parana, with the first cartons expected off the production line in the second half of 2011. The plant will have an initial annual output capacity of one billion carton packs, which is planned to increase to two billion shortly afterwards.
The firm flagged the move as a vital pillar of its growth strategy in the key South American market. SIG forecasts that the region will fuel between 30 and 40 per cent of the expansion in global aseptic carton demand over the next two to three years.
Its market analyses predict that South America will see the second greatest global growth in demand for milk products, after China, with aseptic cartons poised to play a significant role. The extra demand of 1.5bn litres of carton-packed UHT milk will amount to almost a third of worldwide growth, said SIG. The company said the boom in alcohol-free and non-carbonated drinks, particularly juices, nectars and fruit and soy-based drinks, was expected to be “equally positive”. The extra 500-million-litre demand from the region by 2012 was expected to represent a 40 per cent share of global growth.
The company identified Brazil as a major engine in this growth – with the county’s annual 10-billion unit carton consumption only bested by that of China.
“Brazil offers an outstanding environment from an overall economic perspective,” said SIG CEO Rolf Stangl. “Its GDP is enjoying significant growth – an increase of 5.5 per cent is expected for 2010. In international terms, it is one of the biggest economic growth markets. Its need for long-life packed food is growing.”
The new plant, once completed, will boast a total surface area of 130,000 square metres with the 12,000 square-meter first phase initially employing 225 people. Located in the south of the country, the plant offers good road, ferry and airport connections.
“Our South American plant will enable us to meet the growing demand for aseptic carton and to supply customers with our high-quality products even more quickly and flexibly,” added Ricardo Rodriguez, the company’s regional head. “This will result in tangible benefits in terms of logistics and service.”
At the outset, the plant will produce the package formats combiblocStandard, combiblocMidi and combifitMidi. Additional formats may join the range progressively as the construction phases are completed, said the company.
"The construction of the local production plant in Brazil is a logical consequence that takes account of the needs of this growing market,” said Stangl. “The new production plant will strengthen our relationship to our customers in this highly