Packaging producer Huhtamaki (Helsinki / Finland; www.huhtamaki.com) is finally pulling the plug on its EUR 400m plastics rigid consumer goods segment. The Finnish group said it is seeking “strategic alternatives” for the mainly Europe-based business, which it plans to carve out into a new reporting segment on 1 January 2009. “One possible outcome” is a sale of the business representing around 17% of the EUR 2.3 bn group turnover in 2007, CEO Jukka Moisio said.

In future, the packaging maker wants to concentrate on operations where it has a “competitive advantage and good market positions.” These include paper-based, flexible and fibre-moulded products, where it has its own technology platforms and business concepts, said Moisio. He said the plastics operations in question for the most part do not meet management’s criteria for financial performance, and profitability is below the Huhtamaki average.

A sale of the rigid plastics packaging activities would mark a final step in the consolidation of this business that began at the end of 2004. At the beginning of this year, Huhtamaki said it would eliminate a further 100 jobs here – see Plasteurope.com of 07.01.2008. In April, it announced plans to cease production of rigid packaging in the UK – see Plasteurope.com of 02.05.2008.

Huhtamaki on the whole seems to be mired in financial difficulties. In June, the group forecast that earnings for 2008 as a whole would be below the 2007 level (see Plasteurope.com of 24.06.2008).

As part of its ongoing restructuring effort, the packaging producer will seek to improve cash flow and reduce debt. It also plans to kick-start organic growth, with 5% per year the growth target.