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CCL and Steinbeis to merge European and Asian operations

July 20, 2005

t’s not hard to see how global buying trends among the larger FMCG (fast moving consumer goods) corporate end users have reshaped the structure of the label industry. Several key consolidations have led to the formation of some really large enterprises, such as CCL Label, part of Toronto based CCL Industries Inc. Subject to formalities, it will become larger still following the merger of its European and Asian label operations with those of Steinbeis Packaging.
As the dominant partner in the new company, CCL’s contribution comprises label operations in the UK, France, Denmark, Thailand and the Netherlands, as well as a greenfield site in Poland. Also included is CCL Pachem, which operates plants in Austria, France and the UK. CCL owns 51 percent of this company, which becomes a wholly-owned subsidiary.
Steinbeis specializes in battery labels and a diversity of product decoration systems for European consumer goods. Its contribution comprises the value of its operations in Germany, France, the USA and China. The Steinbeis battery label plant in the USA, with revenues of approximately Cdn $25 million, will subsequently become a wholly owned subsidiary of CCL Label Inc. in the USA.
The combined network of European and Asian label manufacturing facilities will serve large global customers in the consumer products, health care and premium food and beverage markets. CCL is allocating Cdn $15 million to build new factories in the fast growing markets of Eastern Europe and China. Geoff Martin, president of CCL Label, who becomes CEO in addition to his North American responsibilities, said these investments will give CCL Label a network of over 30 sites worldwide and total revenues of more than Cdn $700 million.
Donald Lang, president and CEO of CCL Industries, says that pooling the groups’ respective interests will accelerate CCL’s label strategy. “It will give the new company the financial strength to continue investing, while bringing to us one of the most respected label businesses in Europe as our partner. We look forward to a long association with the Steinbeis family and their contributions to our new venture.”
Steinbeis Packaging has been involved in the European label industry for nearly 50 years and now has group sales of around Cdn $150 million. “This transaction now gives the management and employees of Steinbeis Packaging the opportunity to play a major role on the global stage. We are particularly pleased to become a part of the largest company in the industry worldwide,” said Michael Steinbeis, chairman of Steinbeis Holding.
Coinciding with the new venture, in July CCL Industries sold a label manufacturing plant in Winnipeg, Manitoba, for Cdn $7 million to Color Ad Label, a private converter of flexible packaging and labels. The sale forms part of a strategy to increase CCL’s pharmaceutical business in Canada along the lines of what it offers drug companies in the USA and Europe. Similarly, the company acquired Graphiques Apex Inc., a Montreal based producer of leaflets for pharmaceutical products. It paid Cdn $3.7 million, including assumed debt, for the company which has annualized sales of approximately $4 million.
• CCL Industries recently completed a joint venture with a Portuguese contract manufacturer of products in the personal care, cosmetics, medication and household care sectors. It merged CCL’s Custom Manufacturing operations in Europe with those of COLEP Europe, including a metal packaging business. ColepCCL will service customers from CCL’s two plants in the UK and Germany and from COLEP’s four plants in Portugal and Poland and two in Spain.
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