Purchasing all outstanding shares in the Indian company will give the Japanese company its first manufacturing and marketing base in the subcontinent.
January 26, 2017
Japanese paper and pulp giant Nippon Paper is all set to enter India by acquiring the country’s largest maker of paper beverage cups Plus Paper Foodpac, the company said in a statement. Although the deal size was not disclosed, sources said it could be around Rs 100 crore. Promoted by BK Modi of the Spice Group, Plus Paper counts Kentucky Fried Chicken and other leading multinational fast-food chains among its customers.
Earlier in December, Nippon Paper had agreed to buy 100 percent stake in Plus Paper. Purchasing all outstanding shares in the Indian company this month will give the Japanese company its first manufacturing and marketing base in the subcontinent. Plus Paper operates two factories in India. Nippon Paper intends to use its manufacturing knowledge to boost factory productivity and quality.
This will be a part of Nippon Paper Group’s overseas expansion initiative for the paper container processing business following the recent opening of its plant in Vietnam. In Vietnam, Nippon Paper has taken ownership of the manufacturing and marketing operations of local paper cup market leader Viet Hoa My Service Trading Production.
Nippon Paper expects demand for paper cups by India’s restaurants to grow along with an expanding middle class. India’s fast-food market will rise by an estimated 50 percent from 2015 to reach USD 25.7 billion in 2020, according to Euromonitor International.