A long-standing, successful joint venture business is expanding its product line, location of product availability and contractual agreement.
Huhtamäki Oyj has enjoyed a fruitful relationship in Arabian Paper Products Company (APPCO) with Olayan Saudi Holding Company (OSHCO), and now Huhtamaki's ownership in the joint venture will increase to 50 percent. In collaboration with an expanded product line, APPCO announces its operative territory will expand to also include Middle Eastern and Northern African countries of Algeria, Egypt, Iran, Iraq, Lebanon, Libya, Morocco, Pakistan, Palestine, Sudan, Syria, Tunisia and Yemen, whereas the company’s previous line was only distributed throughout six Gulf Cooperation Council (GCC) countries.
The product range will grow to include foodservice packaging products in all Huhtamaki Foodservice Europe-Asia-Oceania areas of business.
Starting April 1, Huhtamaki will be able to merge the joint venture company as a subsidiary in the group’s financial reporting through the revised shareholder’s agreement. A one-time gain of nearly eight million euros will be logged during the second quarter of 2016 in the Foodservice Europe-Asia-Oceania business segment as a benefit of the transaction. Additional shares are gained at approximately four million euros.
APPCO was launched in 1985 in Al-Khobar, Saudi Arabia, as a joint venture company between Huhtamaki and OSHCO. Huhtamaki’s previous ownership in APPCO was 40 percent. The business expansion is part of Huhtamaki’s strategic plan to better its position in the Middle East and North Africa. APPCO’s annual net sales in 2015 were roughly 24 million euros.