Huhtamaki completes strategic review of rigid plastic consumer goods operations and restructures operations in Foodservice Germany.
As a result of successful restructuring activities in the rigid plastics business in Italy during the year 2011, it has been decided to continue operations in Turin, Parma and Buccino.
The operations will be integrated into the Foodservice Europe-Asia-Oceania segment from January 1, 2012. The annual net sales of the unit are approximately EUR 50 million and are currently reported in Other activities. The integration concludes the strategic review of the rigid plastic consumer goods operations commenced in 2008.
Huhtamaki has started negotiations targeting cost reductions at the Foodservice plastics unit in Alf, Germany in order to restore the unit's profitability. Approximately 100 employees are expected to be affected. To cover the costs of planned restructuring activities, a one time charge of approximately EUR 5.7 million will be booked in the fourth quarter 2011 in Foodservice Europe-Asia-Oceania segment. The restructuring activities are expected to result in annualized savings of EUR 3.6 million, of which approximately EUR 3 million are expected in 2012.
In 2007, as part of the restructuring of rigid plastic consumer goods operations in Europe, significant impairment charges related to plastics consumer goods assets were booked. Certain of these plastics assets are currently used by the Foodservice business unit in the UK.
Due to the improved business performance and positive cash flow expectations of the UK Foodservice unit, an impairment reversal of EUR 6.5 million related to those plastics assets will be booked in the fourth quarter 2011. The reversal will be reported as a one time gain in Foodservice Europe-Asia-Oceania segment.
Huhtamaki completes strategic review of rigid plastic consumer goods