Packaging MEA team takes a closer look at the company with a 100-year history. Huhtamaki continues to grow, looking to reach deeper into Africa, and has invested in a multi-million-euro new plant near Cairo
Huhtamaki, a multinational food packaging specialist headquartered in Finland with a century-long history, has launched a new, start-of-the-art flexible packaging unit in Egypt, a €23 million investment which marks the company’s expansion deeper into the African continent.
The new facility, located on a greenfield site in 6th of October, a city about 30km west of Cairo, aims to not only serve the existing Egyptian market and export to Europe, but also expand into the Comesa (Common Market for Eastern and Southern Africa), a free trade grouping comprising 21 countries.
Occupying 37,000 square meters, with ample room for expansion and a budget for some 250 employees, the new manufacturing unit is owned and operated as a joint venture, of which Huhtamaki Egypt owns 75%.
The remaining 25% is owned by Ayman Korra, who has been Huhtamaki’s joint venture partner in the Egyptian fibre packaging business since 2003.
“The Egyptian market is sizeable, and with the rapid population growth in Africa we expect future growth opportunities both for us and our customers,” says Olli Koponen, President, Flexible Packaging, Huhtamaki.
Regional strength boosts expansion goals
Huhtamaki Egypt was established in 2000 as a joint venture between Mr Korra and the company known at the time as Huhtamaki Van Leer, to produce egg trays for the local market.
Production started in March 2001, turning out moulded fibre products for the egg and wider food industry in the local, Gulf, North Africa and Northwest Africa markets.
The company continues to produce large quantities of such products, and currently has 54 employees, but the major recent investment is aimed at increasing Huhtamaki’s reach in Africa.
The expansion plans were triggered by the devaluation of the Egyptian pound, which attracted foreign business, and Huhtamaki’s strong presence in the UAE, as Finance Controller Mohammed Al Qady explains: “After devaluation, with an open market and ready customers, opportunities were identified that led to investing in Egypt. Furthermore, Huhtamaki Dubai’s associations with big players like Nestle, Unilever and Mars helped Huhtamaki Egypt grow.
“This arm of Huhtamaki has been established to serve the Comesa region, but we also plan to cater to some European countries as well as the local market. “Our target for the next year is to achieve an annual turnover of €26 million.”
The tech behind the dream
While visiting the new 6th of October facility, Packaging MEA also speaks with Huhtamaki Egypt’s Sales Director, Sameh Mohamed.
He explains to us the technology in place which will help the company achieve its expansion plans.
“We have two state-of-the-art Bobst rotogravure presses installed and running, complemented by three lamination lines, one each of which is a combi super laminator from Nordmeccanica and Bobst, respectively,” he says.
“We are also waiting for a third rotogravure press, which is again a Bobst Rotomec RS 4003, which was ordered as part of Phase 1 of our new facility.”
As for Phase 1, Mr Mohamed says production will begin on February 3, with a badge capacity exceeding 1,200 tons, or 400 tonnes per machine.
Phase 2, meanwhile, will take a different direction.
“Phase 2 is not related to printing and converting,” he says.
“It is related to engraving, polyethylene-blown film, and so on, primarily planned to complement and support our existing business.” And expansion does not compromise sustainability, says Mr Mohamed. In fact, such an approach is expected of them.
“Big players like Mars, Nestle, Unilever and Mondelez are the role model for the entire market,” he says.
“Sustainability is one of their main concerns, and they are relying on us because we are one of three multinational converters in Egypt focusing on major multinational brands within the flexible packaging realm. “These global brand owners expect us to adhere to their sustainability norms and Huhtamaki is very much ahead in this initiative.”
“The majority of the local brands here in Egypt concentrate on their day-to-day business, so they consult with us about sustainable options to their flexible packaging requirement. We co-ordinate with the experienced and professional team in Dubai for R&D and production and sustainable solutions.”