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Packaging & design

WestRock’s new US$125 million corrugated packaging plant to increase the company’s production capacity in Brazil by 25%

Brazil accounts for 3% of the WestRock’s total revenues, being its highest profitability operation worldwide.

In 2017, WestRock celebrated 75 years of business in Brazil and announced investments that not only ensure the continuity of its operations, but also the expansion of its production capacity. The US-based multinational company is one of the global leaders in paper and packaging solutions, with more than 300 branches around the world, and will invest US$ 125 million to build its largest corrugated cardboard plant in the city of Porto Feliz, São Paulo.

Cynthia Wolgien, Corporate Communications Manager at WestRock (...)

Cynthia Wolgien, Corporate Communications Manager at WestRock Brasil

The new plant project has been under development since 2012, when the company invested US$ 480 million to start production of high-performance kraft paper (HyPerform) at the Três Barras plant, in the state of Santa Catarina. Brazil’s economic downturn resulted in temporarily postponing the plans of the board, but working very close to its capacity limit, the expansion was inevitable.

WestRock Brasil’s current corrugated cardboard plant was inaugurated in the 1940’s in the city of Valinhos, 80km from Porto Feliz. In addition to having an old-fashioned layout, which hasn’t undergone any substantial technological upgrading for the last 15 years, the headquarters were set up in the city center, making it virtually impossible to expand its facilities. Operations will be closed there within the second quarter of 2019, when the company begins activity in the new mega-plant.

In recent years, we have investigated land options for the construction of the new plant in Valinhos, but the searches have been fruitless due to the specific layout and land size required for operations. Porto Feliz is located about 1.5 hours away from São Paulo. It has an excellent logistics network and is strategically located to serve the local industry and the rapidly developing markets in the South-East and Midwest regions of Brazil,” says WestRock’s Corporate Communications Manager, Cynthia Wolgien.

According to WestRock, the plant will cover an area of 240,000 m² and will have state-of-the-art equipment, including new printers and corrugating machines that will allow the manufacturing of 400 million m² of corrugated cardboard per year – an increase of 25% of its current capacity. “This will certainly be our largest and most effective plant in Latin America. In addition to a greater production capacity, the Porto Feliz project will focus on portfolio differentiation and offer customers unmatched value for money”, says Wolgien.

Brazil currently accounts for about 3% of WestRock’s global revenue. In the 2017 financial year ending in September, total net sales were US$ 14.8 billion. The Brazilian operation, which recorded revenues of R$ 1.4 billion during this period, is the company’s highest profitability worldwide and ranks second in the supply of carton packaging in Brazil, with an 8% market share behind the market leader, Klabin.

According to company data, the cosmetics, personal care and fragrance industry now accounts for 10% of WestRock’s packaging production in Brazil. Early last year, the company sold its specialty closures and dispensing systems business to
consumer goods packaging company Silgan. The US$ 1 billion deal involved the acquisition of 13 plants. “The decision to sell the business was based on WestRock’s goal of being the premier partner and sole supplier of paper and cardboard packaging solutions to our customers,” claims Wolgien.

Renata Martins

Portfolio

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