Huhtamaki CEO: €412M Elif acquisition targets Turkey and Egypt’s flourishing flexible packaging scene
17 Aug 2021 --- Huhtamaki is acquiring Elif, a flexible packaging supplier to global FMCG brand owners with operations in Turkey and Egypt, for €412 million (US$483 million).
PackagingInsights speaks with Charles Héaulmé, president and CEO of Huhtamaki, to understand how the Elif acquisition extends the Finnish packaging and labeling supplier’s regional reach and cross-learning in environmental sustainability.
“There is genuine growth in the [Turkish and Egyptian] markets and the growth is faster than in Europe. The population is growing and trade is still modernizing,” Héaulmé highlights.
“Sustainability and recycling expectations are more developed in Turkey than in the Middle East, [and] very consistent with Europe.”
A “perfect fit” for beyond F&B
Huhtamaki’s portfolio already caters to various F&B sectors globally, ranging from compostable blueberry packs in Mauritius to fiber-based egg cartons in the US and Brazil.
The company currently has a foodservice packaging unit in Turkey, and a flexible packaging unit and a fiber packaging unit in Egypt. The acquisition further solidifies this stronghold, while making it easier to serve other markets efficiently from the two countries.
More than 90% of Elif’s current product portfolio is recyclable and also includes compostable films.Moreover, as Huhtamaki is broadly looking to expand beyond F&B sectors and Elif’s current portfolio is mostly non-food, Héaulmé regards the acquisition as a “perfect fit.”
Synergy in tech and sustainability
The acquisition is mainly about growth, says Héaulmé. “The nature of Elif’s business and the markets it serves, combined with that of Huhtamaki, create a lot of cross-selling opportunities,” he notes.
The acquisition adds state-of-the-art flexographic printing capability with in-house cliché production to Huhtamaki’s technology offering. Elif’s capability in flexographic printing is something Huhtamaki has “not had at scale in flexible packaging,” adds Héaulmé.
Elif is a strategic move for Huhtamaki as it aims to make 100 percent of its products recyclable, compostable or reusable by 2030. The acquiree has already established 90 percent of its product portfolio as recyclable, which Héaulmé calls “remarkable within the flexible packaging industry.”
Specialized in high-quality sustainable flexible packaging, Elif uses both post-industrial and post-consumer recycled polymers as raw materials. It also has an advanced system of collecting and utilizing production scrap from both its own and customer locations.
Elif’s product portfolio also includes compostable films, bio-based materials, biodegradable PE, and fully recyclable HyPEr/PE laminate structures.
In May, Elif scored gold in the Amenities Initiative Awards in the sustainable packaging category with its compostable packaging film.In further sustainability highlights, Huhtamaki’s CEO lists Elif’s advances in developing paper-based flexible packaging and “constant search” to improve its operations’ carbon footprint.
Plans under new ownership
Huhtamaki will acquire Elif for a cash-free, debt-free purchase price of €412 million (US$483 million). To support the financing of Huhtamaki’s acquisition of Elif, Huhtamaki signed a bridge financing facility of US$500 million with Citi, who also acted as an advisor for the transaction.
“Under new ownership, we will continue to deliver sustainable solutions to our customer base globally, enhance our focus on fast-growing emerging markets, realize synergies through scale and expand our capabilities,” says Selçuk Yarangűmelioğlu, Elif’s CEO.
In 2020, the company’s net sales were approximately €163 million (US$195 million) and had an export ratio of 62 percent. Elif employs approximately 1,500 people in its two state-of-the art manufacturing locations in Istanbul, Turkey and Cairo, Egypt.
By Anni Schleicher
