Huhtamaki (Espoo / Finland; www.huhtamaki.com) is taking a number of measures to improve the cost competitiveness of its Foodservice Europe-Asia-Oceania segment. When reporting its financial results for 2015, the Finnish packaging group had indicated that developments in the business varied extensively according to the region, pointing out that its Oceania business had underperformed, while net sales in China declined (see Plasteurope.com 17.02.2016). The units in question also had an adverse effect on Q1 2016 earnings.

In southern China, Huhtamaki will consolidate its foodservice packaging manufacturing operations into one unit, which will focus on “a defined core foodservice packaging product range.” At the same time, the company said it will strengthen its outsourcing capacities. The initiatives, which Huhtamaki said will improve competitiveness and help it capture future growth opportunities in the country, will impact about 350 employees.

Further south, in Henderson / New Zealand, the company also intends to reorganise its foodservice packaging production. The efficiency improvement will likely result in the layoff of about 15 workers. Huhtamaki said the measures in both countries – coupled with a “potential environmental remediation action” at its former production site in Viul / Norway, which was shuttered in 2013 – will result in a EUR 8m charge booked as “items affecting comparability” (IAC) for the Foodservice Europe-Asia-Oceania business segment in Q2 2016. However, the company added that combined with the non-recurring gain of about EUR 8m related to an increase in its ownership in Arabian Paper Products, the total effect on its Q2 2016 IAC will be “slightly negative”.