EUROPAC SELLS ITS FACTORY IN TANGIER (Company news)
The Europac Group (Papeles y Cartones de Europa, S.A.) has reached an agreement to sell its packaging factory in Tangier (photo) to International Paper. The transaction amounted to 40 million euros, which after balance sheet adjustments add to 44 million euros. The operation contributes a consolidated net profit of 10 million euros to 2017 fiscal year, after investing in the construction, start-up and operation of the business. The sale agreement has the approval of the Conseil du Concurrence, the anti-trust authority in Morocco.
-The strategic objective of the group is to grow in the packaging and waste management sectors in a priority market such as Spain without increasing the debt ratio defined in its Strategic Plan 2015-2018
-The recent acquisitions of a packaging factory in Lucena (Córdoba) and of Transcon S.A., a waste management unit in Valladolid are framed within this context
-The packaging factory in Tangier has been acquired by International Paper Container Holdings (Spain), S.L. for an amount of 44 million euros after balance sheet adjustments
Currently the Europac Group is developing a growth project in Spain with the aim of acquiring greater market share, strengthening its commercial policy and integration strategy.
In this context the acquisition of the Lucena packaging factory (Córdoba), the investment project to duplicate the installed capacity of the Dueñas packaging factory (Palencia), the planned investment in three converting lines in the Alcolea del Cinca factory (Huesca) to transform corrugated board into packaging for the final customer increasing its added value, as well as the expansion of the range of recycled coated papers at the Dueñas paper mill, are being carried out. Regarding the waste management business, the company has recently acquired Transcon, S.A., a waste management unit in Valladolid that will allow Europac Recicla to expand its range of services and cater for activity sectors where it was not present before.
Jose Miguel Isidro, Executive Chairman of the Europac Group, states that "we have always expressed our willingness to grow in a priority market such as Spain, especially in the packaging and recovered paper business lines."
Evolution of the Moroccan market
At the close of year 2016 the turnover of the Tangier factory, inaugurated in February 2016, was 8 million euros with negative EBITDA of 2 million euros. In 2017 the Moroccan factory operation has an expected marginal effect upon Europac’s consolidated accounts.
At the moment Europac considers that the Moroccan market is no longer strategic because of the difficulty for increasing its footprint with new industrial facilities due to the growth of the current installed capacity and the announcement of new projects.
According to Jose Miguel Isidro, "for all these reasons, from the point of view of creating value for shareholders, our flexibility and adaptive capacity to establish priorities within a global strategy has led us to consider as advisable the sale of the Tangier factory."
(Europac Papeles y Cartones de Europa S.A.)