Full Ownership of German Joint Venture

Leading laminate tube manufacturer Essel Propack (Mumbai / India; www.esselpropack.com) has bought the majority share in its German joint venture Essel Deutschland (EDG) at an enterprise value of USD 32m (EUR 28.5m). The company has raised its stake from 24.9% to 100%, making the German firm a wholly-owned subsidiary.

Essel said the acquisition will help it unlock synergies such as enhanced cross-selling opportunities in German markets, flexibility in sourcing and better capacity utilisation at its European plants, as well as allowing it to offer high decoration laminated tubes to premium non-oral care brands across Europe.

“This move will help us to grow a strong platform for growth in Europe, especially in the non-oral care category. As we have a ready customer base, this will help improve our revenue growth through synergies. The acquisition will add 63% to our European revenue on an annualised basis,” commented Alan Connor, Essel Propack’s European business vice president.

The Indian company said it will also benefit from a long-term supply agreement EDG recently signed with a local oral care company. Essel said it holds a 36% share of the global oral care market in volume terms.

Ashok Goel, Essel Propack’s vice chairman and managing director, added that the acquisition is in keeping with its overall plans for achieving revenue growth of 15%, profit-after-tax growth of 20% and achieving its Mission 20:20:20 – its aim to reach an EBITDA margin of 20%, return on equity at 20% and return on capital employed at 20% within the next two years.