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Paper company, Stora Enso is investing in stormy Pakistan

Tuesday, 18 September 2012
The paper company, Stora Enso has signed an agreement with Packages Ltd. of Pakistan to establish a joint venture to be named Bulleh Shah Packaging, report various Swedish media sources quoting a press release.

Stora Enso's initial shareholding is 35 percent but there is a commitment to increase that in a later stage, when certain conditions are met to the value of 50 percent.

The joint venture will include activities at Kasur Mill and a plant in Karachi, both currently owned by Packages Ltd.

Furthermore, the joint venture will mainly produce packaging for local and international customers in the fast growing Pakistani market.
The company will employ about 950 people and its turnover in 2012 is expected to be $130 million.

The agreed value of 100 percent of the new company is about $ 108 million on a debt free basis. The total purchase price could reach $ 125 million, including an additional fee based on the results for the second half of 2012 and first half of 2013.

As part of the agreement, both parties agreed in 2013 and 2014 to an extensive investment of $ 135 million to develop the business further.

The joint venture will have a positive impact on earnings per share and over time and through new investments to exceed Stora Enso targets - return on capital employed (ROCE) of 13 percent, writes Stora Enso, according to media reports.
By Scancomark.com Team

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