AR Packaging has been in an expansion phase for a few years, including acquisitions, coupled with continued migration from general packaging to selected segments where AR Packaging has a competitive edge. The group has a strategic plan built on three pillars: further growth in Europe in selected business segments, global expansion with selected packaging solutions and further improved operational excellence and cost-efficiency. In order to secure that AR Packaging continues to sustainably meet its customers’ increasing expectations on high efficiency, broad expertise and strong innovation skills, a review of the operational footprint of the Group has been initiated.
“AR Packaging has gained significant new business in targeted areas as set in our strategy,” says Harald Schulz, President and CEO at AR Packaging. “After a successful integration of the businesses acquired, we now take a holistic view on our footprint. Strong skill centres and further site specialisation through focused technology and know-how will increase the Group’s ability to lead future developments while aligning presence to optimal locations.”
Cutting edge investments are on-going at several plants across Europe and cover a span from state-of-the-art equipment for improved efficiencies to expansion of selected plants. “We have a vast investment program in place which includes for example four new printing machines during 2016-2018, as well as expansion of our plants in Krakow, Poland, and Tabasalu, Estonia,” continues Schulz. “The strengthened centres of excellence will increase AR Packaging’s capabilities as well as capacity. Therefore, it is our plan to actively consolidate and optimise our operations in certain locations.”
Following the acquisition of the European operations of Mead Westvaco in 2015, AR Packaging operates three plants in Russia. Sales volume development does not justify three plants in the region at the same time as price pressure increases. Consequently, capacity and infrastructure costs need to be reduced to meet the profitability demands for the Russian rotogravure operations. The A&R Carton plant in Moscow will be closed and the Group will serve the Russian market from its two plants in St Petersburg and Timashevsk, each with focused technology, competence base and increased production capacities.
To be competitive and profitable in the Nordic carton market the cost base needs to be substantially reduced and asset utilisation increased. Therefore, the company took the decision in late September to reallocate volumes to other plants in the Nordic region and stop production at the Kauttua site. Sales, customer service and product development functions will remain in Kauttua, however.
The announced changes at the Russian and Finnish operations will have an impact on around 150 employees. AR Packaging will offer employment at other locations to the utmost extent feasible.
