Huhtamaki (HQ: Eteläranta 8, FIN-00130 Helsinki), the international food company based in Finland, has agreed to acquire most of the operations of Sealright Co Inc., a publicly listed US company and the leading North American manufacturer of packaging systems and paperboard containers for ice cream and other frozen desserts. The final agreement between Huhtamaki and Sealright, which was executed on March 2, is limited to Sealright's rigid packaging business and Australian unit and excludes its flexible packaging activities and the Styrotech labeling unit.

The portion of Sealright that Huhtamaki will acquire had net sales of approximately USD 160m (FIM 880m) in 1997. Huhtamaki's CEO, Timo Peltola, said that its "operating margin was clearly below the historical average and somewhat lower than the corresponding figure for Huhtamaki's food packaging division, Polarcup." Pursuant to the agreement, Sealright's flexible packaging activities and Styrotech business will be distributed to Sealright's shareholders simultaneously with the acquisition of Sealright's remaining business by Huhtamaki.

For Huhtamaki, the acquisition of Sealright is a major step in developing its food packaging operations. Huhtamaki's Polarcup division is already the industry leader in several segments of rigid containers in Europe and Asia-Pacific. "Sealright will immediately place us into a world leadership position in premium ice cream containers," said Peltola. "However, the opportunity to add value is in taking its proven packaging systems and products to new markets through Polarcup's company network, which spans 30 countries."

Sealright has been the leading US manufacturer of frozen dessert packaging for decades. Manufacturers of premium take-home and in-store ice cream brands constitute a major part of its customers. The rigid packaging business, with manufacturing units in Fultin, NY and Los Angeles, CA, as well as R&D, engineering and equipment manufacturing facility in DeSoto, KS, employs 1,000 people.

Huhtamaki posted pre-tax profits of FIM 519m (USD 100m) on net sales of FIM 6.4bn (USD 1.2bn) in 1997. The Polarcup food packaging division expanded by 27% following a string of acquisitions in Europe and Asia-Pacific and accounted for half of the consolidated sales and earnings. Leaf, the confectionery division, accounted for the other half of the sales.

READER SERVICE: Details on the financial year 1997 of Huhtamaki (English): PIE-No. 42087.