Rottneros Establishes New Packaging Division

March 23, 2006 (Press Release) - The pulp producer Rottneros is to start production of trays made of paper pulp which will be used for frozen ready meals. This is a brand new line of business for Rottneros, which is thereby moving into a new stage in the production process: manufacturing a product that is supplied direct to the end-user.

This business, which will be carried on in the new division Rottneros Packaging, is expected to account for around 15 percent of Group net sales within a five year period and to take a share of around five percent of the European market. The tray was developed jointly with others including Gunnar Dafgård AB, the biggest producer of ready-prepared frozen food in the Nordic region. Joakim Stockhaus, who has experience of both the packaging and the food industries, has been appointed as responsible for the new division.

Broadening the Business and Exploiting Synergies
"The reason why we are investing in a brand new business and product area is that we want to broaden our business, in order to get away from our narrow dependence on the USD exchange rate and the business cycle for pulp. We have chosen to produce food trays partly because there are very clear synergies between traditional pulp production and the production of trays, and partly because in turning to the food industry we increase the spread of risk to an industry that is not as dependent on the business cycle."

The Taiwanese company Evergreen Pulp Packaging & System, Inc. (EPPSI) is behind the technology. Rottneros has the worldwide licence to manufacture food trays from cellulose fibres by EPPSI's method and using the company's machinery. The machinery is produced in Taiwan, making production costs relatively low.

Growing Market
The main area of use for Rottneros's trays is packaged frozen and chilled food portions for small households. The products will meet growing demand for everyday convenience food that is easy to shop for and easy to use.

"The market for this area amounts to around 6 billion trays per year in Europe, the majority of which consists of entirely synthetic CPET trays. It is growing at a rate of nearly 10 percent per year," says Lars Blecko.

SOURCE: Rottneros

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