10/24/2008 09h37
Rigesa transfers technology to Indian Company
Gazeta Mercantil 10/24/2008
Rigesa, Brazilian subsidiary of North-American MeadWestvaco Corporation (MWV), has just formed an association in India with producer of corrugated cardboard paper packaging Wadco Packaging, acquiring 51% of the company's stocks. According to the president of the company in Brazil Paulo Tikian, it was a great opportunity identified by the group to enter the Indian market, considered a very promising one. "They are quite delayed and we are going to make the transfer of production knowledge from here to there", says the executive without mentioning the value of the deal. The project foresees manufacturing agricultural packages for Indian producers, where up to 40% of the products are damaged during transportation before getting to the market, due to inefficient after-harvest, processing and handling practices, according to the company. Rigesa's president does not inform the total capacity of the plant, but he says that the MWV Wadco joint venture is the first one of this kind in India and only became possible due to changes in that country's rigid laws regarding foreign investment, which limited participation in 30% of the capital. "This opening represented a great business opportunity for Rigesa because everything has to be done in India", said the executive, adding that the deal was idealized before the crisis, but the company believes that, in spite of it, in the long run the opportunities continue preserved. Tilkian affirms that the company does not intend to change its strategy because of the economic world problems. This includes the installation of the 6th plant of corrugated cardboard paper packaging in Brazil, which is foreseen for 2009. The new unit, which will be established in the municipality of Araçatuba, in the interior of São Paulo, should increase the company's capacity by 10% in a first stage. The Brazilian packaging market, estimated at 4.3 billion of square meters, grew 4.2% in the last year. The new unit will be installed in less than five years after the implantation of the last unit and aims to release the South and Southwest units. With the expansion of the activities, Brazil already responds to nearly 10% of MWV's businesses in the world, whose sales amounted to US$ 6.91 billion last year.
