Ireland's Smurfit Kappa, which is one of the largest paper-based packaging producers in the world, will acquire a third plant in Bulgaria. After buying factories in the towns of Kazanlak and Lukovit four years ago, the group is now eyeing a part of the business of Shumen-based Artemis. The notified transaction concerns the production of bag-in-box packaging and the related properties. The deal is awaiting approval by the Commission on Protection of Competition (CPC). The price has not been disclosed.
Bag in box
The group's local subsidiary, Smurfit Kappa Bulgaria, plans to acquire direct sole control of that part of Artemis's business that is responsible for the production of plastic foils and foil packaging of the bag-in-box type, the notification to the CPC shows. The deal will also include the related properties, which are owned by Hel Bul Estate, a company of Artemis's owners.
The transaction is expected to affect the market of flexible packaging for liquids and closing accessories for bags in box, the companies note. There is no public information about the volume of the business. Artemis's total turnover for 2022 is close to 62 million levs (about 31 million euro) and Smurfit Kappa Bulgaria has about 53 million levs sales. Both companies declined to comment on the agreed deal.
Who is selling
Artemis was set up in the city of Shumen, northeastern Bulgaria, in 2005. It is owned by Greece's Pollas Glass and Shumen-based Linea Pack (50% each). Both companies are family-run. Pollas Glass deals in production of glass packaging and is based in the city of Serres. Linea Pack is owned by Ivan Mihaylov and his family.
Artemis manufactures caps for wine, hard alcoholic drinks and bags in box. In 2022 the company reported a 56% rise in revenue to 61.8 million levs and a profit of 3.6 million levs. The company rents a building from Hel Bul Estate, which is owned by the Pollas and Mihaylov families. It was one of the first clients of Industrial Park Shumen, where it bought 7200 sq. m of land in 2013 and where the factory is located.
The buyer in Bulgaria
Smurfit Kappa Bulgaria is successor to Balkanpack, the corrugated packaging producer in Kazanlak, which the Irish company acquired in early 2019 through its Netherlands-registered subsidiary Smurfit Kappa Europe. The deal included one more factory in Kazanlak, Elzem Bulgaria. Both were owned by Form Bulgaria, a company of Turkish citizen Muhsin Ozturk. The buyer then noted as an advantage Balkanpack's specialization in large-size and industrial packaging, as well as its position in a region with developed infrastructure and many customers.
Shortly after, the company acquired Vivatel, the Lukovit-based producer of conventional and laminated packaging. That added one more location to the production facilities of the Irish group, in line with its plans for strengthening its geographic footprint in the Balkan region. Smurfit Kappa also has factories in Serbia, Greece and Romania.
Smurfit Kappa Bulgaria reported 52.7 million levs sales in 2022 and a loss of 1.3 million levs. The company employed 209 people as of July 2023.