Smurfit Kappa targets US/Mexico expansion

28 September 2012


Smurfit Kappa Group has announced its agreement to acquire Orange County Container Group – a corrugated and containerboard manufacturer with operations in northern Mexico and the southern USA – for a total cash consideration of US$340 million (c. €260 million).

The Ireland-headquartered paper-based packaging company says OCCG is “a strong strategic fit” with its existing business, and expects the integration of the American company to deliver “at least US$14 million of synergies by the end of year two”.

The US$340 million cash consideration will be funded from the Group’s existing cash resources. OCCG employs 2,800 people, 2,000 of whom are in Mexico, and is expected to generate US$53 million of EBITDA for the full year 2012.

It is anticipated that the transaction will complete in the fourth quarter of 2012 subject to customary completion conditions and regulatory approval.

“This transaction further increases the contribution of our existing successful Latin American business, providing us with a very significant position within the key Maquiladora trading region and substantially strengthening our position in the higher growth Mexican market,” says Smurfit Kappa Group CEO Gary McGann.

OCCG produces, markets and sells high graphics and conventional corrugated containers, point-of-purchase displays, and produces 290,000 tonnes of recycled containerboard on two paper machines in Dallas.

It operates seven wholly owned recycling centres in Texas, Oklahoma and Arkansas, said to be a significant strategic resource providing security of supply of recovered paper for the mill and of containerboard for the corrugated operations.

Real-time web service
Smurfit Kappa has also introduced its first, real-time, web-based live chat service for its Cor-Trade customers, designed to simplify customer interaction with the Cor-Trade website and streamline the communication channel between customers and the business.

Available between 9-5pm daily, specialist Cor-Trade agents are available online to answer queries, offer advice and direct customers to relevant areas of the company’s website and to gain access to the complete range of Smurfit Kappa products and services.

The new initiative follows the successful launch of the company’s free-to-use online Corrugated Box Calculator, which allows customers to refine their packaging specification by calculating, in real time, the minimum number of cartons that can be ordered or the exact amount of sheet required to achieve a set number of cartons.

Smurfit Kappa Cor-Trade sales & marketing director Mark Richards comments: “The new live chat service is designed to bridge the gap between customers browsing the site and the highly trained specialists at Cor-Trade, who have the knowledge and expertise to answer both simple and complex queries.

“The live chat service means that customers don’t have to endure the perceived hassle of a telephone call for the simplest of questions.”




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