Huhtamaki plans production consolidation in UAE for profitability boost

03 Jun 2024 --- Huhtamaki has revealed plans to consolidate its three flexible packaging manufacturing sites in the UAE. The Finnish food packaging specialist will keep one factory in Jebel Ali and expand its factory in Ras Al Khaimah. 

The transition will take place gradually during the second half of 2024.

According to the company, the consolidation aims to optimize the manufacturing footprint, improve the competitiveness and strengthen the foundation for future growth in the region.

The announced change is part of Huhtamaki’s program to accelerate strategy implementation, published in November 2023. It is expected to materially support Huhtamaki’s profitability, with efficiency improvements leading to savings of approximately €100 million (US$109 million) over the next three years.

The planned consolidation does not represent a material share of Huhtamaki’s sales or profits.

During the second quarter of 2024, the company will book consolidation-related costs in total of approximately €4 million (US$4.3 million). The costs will be booked as items affecting comparability.

In March, Huhtamaki announced plans to consolidate its production footprint in China in the Fiber Foodservice Europe-Asia-Oceania segment. It will close production sites in Tianjin and Shanghai by the end of Q2 2024.

Meanwhile, a survey commissioned by Huhtamaki found that most Finns are satisfied with their recycling habits. More than 80% of those questioned say they recycle paper-based packaging, and nine out of ten recycle cardboard boxes.

Edited by Joshua Poole