M&G Group aims to expand its downstream packaging operations in Europe with backing from new financial partners.
The Tortona, Italy-based firm is in talks with potential investors that M&G hopes will provide funds necessary to grow and develop barrier technology for its Italian PET preform and bottle business, said Giovanni Bolcheni, head of M&G's packaging division.
M&G's packaging activities are concentrated mainly in two Italian subsidiaries: Cobarr SpA in Anagni, with PET preform capacity of 750 million per year; and Pallanza-based ItalPet SpA, capable of producing 1.5 billion PET preforms annually.
Another packaging unit, PET film producer Nuroll SpA of Pignataro Maggiore, Italy, is not directly involved in the project.
This month, M&G announced that it had appointed investment bank N M Rothschild & Sons Ltd. to assist in the search for suitable financial partners.
``Today, M&G packaging activities represent only 9 percent of total group revenues and have remained confined regionally,'' said Marco Ghisolfi, chief executive officer of M&G's polymers business unit and one of the company's shareholders.
``We believe that a financial partner could help infuse the necessary resources to grow this valuable business and to fully realize its important competitive advantages.''
At present, 30 percent of M&G's PET preform/bottles business is in specialized barrier technology products. Bolcheni said the company would like to get that closer to 100 percent - with the new investment, they would like to double the proportion to 60 percent.
``Our aim is to rationalize our production and grow our presence in Europe in this area,'' Bolcheni said in a telephone interview. M&G packaging will supply as much as it can from its existing Italian plants, but could supply big customers through hole-in-the-wall facilities. In time, the firm also will look at opportunities beyond Europe, he added.
M&G, founded in 1953, was a pioneer in PET resin production in Europe and has worked for years to develop gas and light barrier technology to meet specific packaging needs. The family-owned firm now wants to capitalize on its investment, particularly the rapidly growing demand in Eastern Europe.
Bolcheni sees barrier technology as a key to future PET market growth in areas like small soft drink bottles and containers for beer, juice and long-life milk products.
In its core PET resin business, M&G is expanding in the Americas and already has what it said is the world's biggest PET production plant at Altamíra, Mexico. M&G plans to launch an even bigger, 3.3 million-pound-per-day resin plant in Brazil in 2008.