Smurfit Kappa injects US$33M into production facility in Brazil’s populous Northeast
18 Jan 2022 --- Smurfit Kappa is investing US$33 million in expanding its Fortaleza production site in the state capital of Ceará in Northeastern Brazil. The corrugated packaging company identifies Brazil as an essential market for its continued growth.
The investment will expand capacity and innovation capability at the production site to meet the growing demand for innovative and environmentally sustainable packaging in the region.
The expansion, which includes the installation of a new corrugator, will significantly extend the plant’s Shelf Ready Packaging capability for FMCG customers in a range of sectors, including fresh fruit, home appliances and pharmaceuticals.
“Brazil – with a population of 213 million people – is a country with great consumption potential,” Manuel Alcalá, Smurfit Kappa Brazil’s CEO, tells PackagingInsights. “It is the largest corrugated producer in Latin America.”
“It [Brazil] is also one of the largest producers of corn and soybeans and a large producer and exporter of pork, beef and chicken. More than 70% of the products produced are for internal consumption and the remaining for dynamic export markets. Brazil also has a strong R&D and STEM that is developing more and more.”
The Fortaleza production site in Ceará.
Brazilian consumer demands
According to Innova Market Insights, most Brazilian consumers say they agree (36%) or strongly agree (19%) they would be willing to pay more for more environmentally sustainable packaging.
Meanwhile, the majority say they agree (42%) or strongly agree (32%) they would be willing to switch their usual brand for a brand with more environmentally sustainable packaging.
Smurfit Kappa supports these findings. “Brazilians are becoming more concerned about environmentally sustainable packaging,” notes Alcalá. “For example, we recently conducted a survey related to fashion and 65% of the surveyed Brazilian consumers stated the use of [environmentally] sustainable packaging materials is a driving factor in their purchasing decisions.”
Supporting e-commerce
Several high-end printers will also be installed to provide the high precision and quality required for e-commerce packaging.
Additionally, a new innovation center will foster even more customer collaboration and enhance the development of impactful, environmentally sustainable and market-leading packaging solutions.
Innova Market Insights found 35% of global consumers have increased their home food delivery use during the COVID-19 pandemic. However, Brazil is above average, with more than half (58%) of consumers turning to online purchasing.
Smurfit Kappa recorded 41% growth in e-commerce in Brazil in 2020.
“COVID-19 has not affected the operations as we worked closely with health professionals to protect our employees, implementing a series of actions to prevent infection,” adds Alcalá. “In terms of consumption, we saw a growth in e-commerce of 41% in the country in 2020.”
“The combination of an innovation center and state-of-the-art technology will provide greater opportunities to collaborate with customers to deliver innovative, inspiring and [environmentally] sustainable solutions.”
Fast-growing market
According to Laurent Sellier, Smurfit Kappa the Americas’s CEO, almost 30% of the total Brazilian population resides in the Northeast region, making Fortaleza an ideal platform to strengthen the company’s presence in a fast-growing market.
“Brazil is an essential market for Smurfit Kappa, and we are excited to dedicate significant resources from the company’s global investment plan to expand our presence in the Northeast. It is a clear testament to Smurfit Kappa’s commitment to this market,” says Sellier.
In other news, Smurfit Kappa recently had its emissions reduction targets approved by the Science Based Targets initiative as consistent with levels required to meet the goals of the Paris Agreement.
The targets covering greenhouse gas emissions from Smurfit Kappa’s operations (scopes 1 and 2) are consistent with reductions required to keep global warming to “well below” 2°C, says the company.
By Joshua Poole
