CCL Industries announces European joint venture

Canadian-based CCL Industries Inc is to form a 51 per cent controlled European joint venture with Pachem AG, a leading, privately held provider of pressure sensitive, shrink sleeve and in-mold labels.
The new company will operate as CCL-Pachem and will be headquartered at Pachem's existing facility in Honehems, Austria. Its focus will be on providing global consumer companies with package decorating solutions for their premium European brands in the food, beverage and battery categories. CCL will continue to operate its 100 per cent owned, European label company that focuses on the personal care, pharmaceutical and chemical markets.
CCL-Pachem will initially operate from three plants in Honehems, Austria, Avelin, France and Rhyl, U.K., providing a full complement of printing capabilities with 'significant' production capacity. Sales for 2002 are expected to have exceeded Cdn$ 45 million and plans call for a 50 per cent expansion over the next three years.
Technology from the European operations will also be transferred to CCL Label's wholly owned subsidiaries to serve customers in North and Latin America and Asia. This includes a Cdn$ 8 million investment in its South Dakota facility that will bring CCL-Pachem technology to the United States.
Geoffrey Martin, president of CCL's Label Division, said, 'We have long admired the management of Pachem and their rapid growth in the plastic container decoration business. Their expertise in the area of in-mold, off- mold and shrink sleeve systems, coupled with our pressure sensitive and heat transfer label expertise in glass bottle decoration will position us strongly in this growth area of the label industry.'
CCL Industries investment to acquire 51 per cent of the business is approximately Cdn$ 20 million including assumed debt. The Rotogravure label plant in Avelin, France, acquired earlier this year, will be part of the new
joint venture. CCL and Pachem expect to close the transaction during the first
quarter of 2003.
With headquarters in Toronto, Canada, CCL employs 7,000 people and operates 33 production facilities in North and Central America and Europe.