Stora Enso is to establish a joint venture with Packages Ltd of Pakistan, to provide packaging products to key local and international customers in the fast growing Pakistani market. Stora Enso’s initial shareholding in Bulleh Shah Packaging (Private) will be 35% with a commitment to increase the shareholding at the agreed value to 50% at a later stage, subject to certain conditions. The joint venture will include the operations of the Kasur mill and Karachi plant currently owned by Packages.
The deal is due to be completed during the first quarter of 2013, subject to competition and regulatory approval and other customary transaction conditions. It will employ about 950 people and its sales are forecast to be US$130 million (€99 million) in 2012.
The agreed value for 100% of the joint-venture company is approximately US$108 million (€83 million) on a cash and debt-free basis. As part of the agreement, both parties are committed to a substantial US$135 million (€103 million) investment programme during 2013 and 2014, to develop the business further.
Mats Nordlander, executive vice president of Stora Enso’s Renewable Packaging Business Area, comments: “The Pakistani market, with growing demand for packaging products and paperboard, offers an attractive growth opportunity for us and the joint venture will enable us to increase our capability to serve our key customers”.
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