Teich AG and Danapak A/S plan to pool their resources to create a joint venture that they claim will solidify Teich's rank as the third-largest flexible packaging company in Europe.
Teich of Weinburg, Austria, and Danapak of Odense, Denmark, have agreed in principle to merge the Danish operations of Danapak Flexible A/S with Teich's two northern European subsidiaries: Corona Packaging A/S of Denmark and Teich Flexibles Ltd. in Britain.
Corona runs a flexibles plant at Ishoej, Denmark, while Teich Flexibles operates plants in Derby, England, and Dundee, Scotland.
Danapak Flexible has Denmark plants in Slagelse and Horsens with sales and research and development units in Odense.
The new venture, with a work force of 450, is expected to have combined annual sales of 114 million euros ($99 million). Teich will own 60 percent of the venture, which will be based in Odense. Preben Harton, currently managing director of Teich's Corona business, will head the as-yet-unnamed venture.
The deal, which must be approved by European authorities, is due to be completed within the next three months. Meanwhile, the partners will consider changes at the plants, according to Teich AG international sales manager Gerhard Cislinsky.
Teich Flexibles' facilities in Britain extrude, print and convert plastic film and paper packaging for the confectionery, soup and dried foods markets, as well as cosmetics, pharmaceutical and healthcare. The Derby plant runs two extrusion lines and handles metalizing and printing, while the Dundee plant prints packaging, according to Cislinsky.
The Corona business concentrates on the manufacture of aluminum foil and plastics die-cut lidding aimed at the dairy industry as well as blister foil and cold form packaging for the pharmaceutical sector.
Danapak Flexible's plants specialize in extruding and laminating materials also for the pharmaceutical, food and dairy packaging markets mainly in the Nordic region.
During the past couple of years, the partner companies already have built up a working relationship. In that time, Danapak has been a Teich customer.
The new venture will further consolidate Europe's flexible packaging industry, offering both partners greater scale. It will give Danapak a wider market beyond its Nordic base and bring Teich expertise in extrusion and coextrusion technology, according to Cislinsky.
``We think we can cover the [European] market better than we do now ... we will have better standardization of materials with dedicated lines and capacity used better,'' he said.