Huhtamaki is taking actions to improve the competitiveness of its Foodservice business in Asia and Oceania. The actions concern the Foodservice Europe-Asia-Oceania segment's operations in China and New Zealand, which have had an adverse effect on the segment's earnings in 2015 and in the first quarter of 2016.
To improve competitiveness and to better equip the operations for capturing future growth opportunities in the Chinese market, the foodservice packaging manufacturing operations in South China will be consolidated into one efficient, modernized unit. In addition, manufacturing will be focused on a defined core foodservice packaging product range, while outsourcing capabilities will be strengthened to continue serving customers with a full range of high-quality foodservice packaging products. The actions are expected to have an impact on approximately 350 employees across functions.
Manufacturing operations at the foodservice packaging unit in Henderson, New Zealand, are reorganized to improve efficiency of the unit. The reorganization is expected to have an impact on approximately 15 employees.
In addition, following a supplemental site assessment at the manufacturing unit in Viul, Norway, which was closed in 2013, a provision to cover potential environmental remediation actions will be booked.
Related to the above activities Huhtamaki will book approximately EUR - 8 million as items affecting comparability (IAC) in the Foodservice Europe-Asia-Oceania business segment in the second quarter of 2016.
Combined with an earlier announced non-recurring gain of approximately EUR 8 million, relating to an increase of Huhtamaki's ownership in the joint venture of Arabian Paper Products Company, the total effect of IAC's in the Foodservice Europe-Asia-Oceania business segment in the second quarter of 2016 is slightly negative.