Alcan's buys new Indian plant

06-Oct-2008 - Last updated on 07-Oct-2008 at 11:42 GMT

Alcan says that its new Indian facility further strengthens its position “in pharmaceutical flexibles through growth in emerging markets,” which contributed about 20 per cent of its revenue last year.

Located in Chakan in India’s Northern Maharashtra state, the facility will be run by Alcan Global Pharmaceutical Packaging (AGPP), which itself is in the process of being divested by parent firm Rio Tinto.

Rio is selling AGPP as part of a $15bn programme to repay debt, finance its 2007 Alcan acquisition and maintain its focus on the mining and metals industries.

Acquisition of the Chakan site is a further step in AGPP’s expansion in the Indian flexible packaging market following its inauguration of a $10m production plant in Haridwar, Northern India in June.

AGPP president Michael Schmitt commented that: “Chakan is a well equipped plant with dynamic people and an asset base that will definitely complement our current product portfolio.”

Last year, packaging produced by the existing 100-strong manufacturing workforce at the 2,600 square metre plant generated revenue of $3.6m for previous owners Associated Capsules.

Schmitt went on to say that the existing Chakan staff’s “expertise with local pharmaceutical companies will be an excellent addition to our organisation, increasing our ability to service global and regional customers”.

These thoughts are in keeping with comments made earlier this year by Alcan Packaging CEO Ilene Gordon. Speaking at the opening of the Haridwar plant, she said that: "The dynamic Indian market represents an attractive opportunity for Alcan Packaging's strategy of growth.”

Extends global reach

While the new facility and Haridwar plant clearly indicate AGPP’s interest in and commitment to India’s $8.2bn a year drug market, expansion of its manufacturing capacity is also likely to further the firm’s position in the global market.

One of the key targets for Alcan’s flexible packaging range is likely to be the emerging Chinese pharmaceutical sector. A recent Freedonia report suggested that while Europe and the US will continue to account for 75 per cent of drug packaging sales, in a market expected to be worth $45bn by 2016, China will provide some of the strongest growth opportunities.