MWV Will Acquire Ruby Macons Ltd. to Accelerate India Growth Strategy
MWV will become a market leader in fast-growing Indian corrugated packaging sector
RICHMOND, Va.--(BUSINESS WIRE)-- MeadWestvaco Corporation (NYSE: MWV), a global leader in packaging and packaging solutionstoday announced a definitive agreement with Mr. Alibhai Nathani and family to purchase Ruby Macons Limited ("Ruby Macons"), India's top producer of corrugated packaging materials and a leader in the country's growing industrial packaging industry. Terms of the transaction were not disclosed.
"The acquisition of Ruby Macons extends our participation in India, strengthening our presence in a market that we have targeted for profitable growth," said John A. Luke, Jr., chairman and chief executive officer, MWV. "The Nathani family and the Ruby Macons leadership team have built a very successful business and established a best-in-class operation that boasts advantaged operational and technical leadership, strong brand awareness and reputation among converters and brand owners, a highly efficient capital model and an advantaged geographic location within India in Vapi, Gujarat. The addition of Ruby Macons boosts our ability to grow profitably in India by bringing their leading local position and capabilities in packaging materials together with our global expertise and innovation capabilities."
"We've built a significant and highly-profitable industrial packaging business in Brazil over the last 60 years, and we will leverage this experience to serve the rapidly-evolving retail sector and fast-growing middle class in India. Through Ruby Macons and its converting customers, in addition to our own box plant in Pune, MWV will offer a wide range of packaging solutions that address market and consumer needs in India, including innovative solutions similar to those we've developed in Brazil for fresh produce, industrial products and consumer goods markets."
"We are pleased to welcome Ruby Macons to the MWV family and are very excited about the profitable growth opportunities this acquisition creates," concluded Luke.
Ruby Macons is the market leader in corrugated packaging materials in India, producing greater than 150,000 tons annually with significant capacity expansion underway. Founded and managed by the Nathani family since 1986, Ruby Macons' revenues were approximately $80 million over the last 12 months with double digit operating margins and strong return on capital. The company has achieved greater than 20 percent average growth over the last several years and is poised for significant future profitable growth through the expansion plans underway.
"From the beginning, the Nathani family and Ruby Macons' management has built a strong business delivering high quality products to customers and value to all our stakeholders," said Mr. Alibhai Nathani, chairman of Ruby Macons. "After extensive conversations with MWV, through which we came to understand their global leadership, outstanding technical capabilities and strong long-term commitment, we chose them as the right partner to take Ruby Macons to the next level. Our single-most focus while making this decision was to ensure that the business we've built with passion over the last two decades will be in the right hands to ensure long term sustainability for all our stakeholders. Our family will continue to be involved in the business, and we are excited about partnering with MWV."
Ruby Macons' offices and manufacturing facilities, including its two mills containing three paper machines, are located in and around the industrial city of Vapi, Gujarat, 180 kilometers north of Mumbai. These assets will remain in full operation and become an important part of MWV's industrial packaging and global manufacturing platform. All Ruby Macons employees will become MWV India employees and the Ruby Macons management team will remain in place, including Mr. Ashraf Nathani, managing director, Ruby Macons, who will become vice chairman and president of the business.
Mr. Ashraf Nathani said, "I am excited about leading MWV's paperboard operations in India, and I know that we will build a very strong presence in the market. The products, relationships and quality leadership of Ruby Macons will be leveraged together with the strong MWV technical and management teams. I am convinced that together we will have the vision, resources and ability to succeed in a market like India."
The acquisition of Ruby Macons expands MWV's presence in industrial packaging in India, which today includes a manufacturing facility in Pune making rigid, humidity-resistant corrugated packaging for fresh fruits and vegetables, consumer goods, household appliances and pharmaceuticals. Upon closing, the combined business will report through MWV's Industrial packaging segment. MWV has a broader packaging business in India - led by managing director Gautam Sircar and headquartered in Pune, India - delivering innovative packaging solutions for a variety of consumer goods markets, including Healthcare, Beauty & Personal Care, Home & Garden, and Beverage. It also markets specialty chemicals for asphalt paving and other markets.
"Our plan is to continue to drive aggressive growth in this business as part of our broader India and global growth plans," said Peter C. Durette, senior vice president and chief strategy officer for MWV, who oversees the company's business and growth in India. "We see significant potential for high quality, innovative solutions in India, from corrugated and consumer packaging to specialty chemicals that can help solve significant challenges in India and improve the lives of consumers. We are developing insights into the unique unmet needs in the local marketplace and bringing solutions that will benefit customers and consumers in India."
About Ruby Macons Limited
Ruby Macons Limited is the market leader in corrugated packaging materials in India, producing greater than 150,000 tons annually. Soundly managed by the Nathani family since its founding in 1986, Ruby Macons Limited boasts strong operational leadership, a best-in-class reputation, high brand awareness among converters and brand owners, and advantaged geographic locations within India in Vapi and Morai, Gujarat.
MeadWestvaco Corporation (NYS: MWV) is a Fortune 500 global packaging company providing innovative solutions to the world's most admired brands in the healthcare, beauty and personal care, food, beverage, home and garden ,tobacco, and agricultural industries. The company also produces specialty chemicals for the automotive, energy, and infrastructure industries and maximizes the value of its land holdings through forestry operations, property development and land sales. MWV's network of 125 facilities and 15,000 employees spans North America, South America, Europe and Asia. The company has been recognized for financial performance and environmental stewardship with a place on the Dow Jones Sustainability World Index every year since 2005. Learn more at www.mwv.com.
Certain statements in this document and elsewhere by management of the company that are neither reported financial results nor other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of each company, or industry results, to differ materially from those expressed or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties, and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to, events or circumstances which affect the ability of MeadWestvaco to realize improvements in operating earnings from the company's ongoing cost reduction initiatives; the ability of MeadWestvaco to close announced and pending transactions, including divestitures; competitive pricing for the company's products; impact from inflation on raw materials, energy and other costs; fluctuations in demand and changes in production capacities; relative growth or decline in the United States and international economies; government policies and regulations, including, but not limited to those affecting the environment, climate change, tax policies and the tobacco industry; the company's continued ability to reach agreement with its unionized employees on collective bargaining agreements; the company's ability to execute its plans to divest or otherwise realize the greater value associated with its land holdings; adverse results in current or future litigation; currency movements; volatility and further deterioration of the capital markets; and other risk factors discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2011, and in other filings made from time to time with the SEC. MeadWestvaco undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any further disclosures made on related subjects in the company's reports filed with the SEC.
Tucker McNeil, +1 804-444-6397
Jason Thompson, +1 804-444-2556
KEYWORDS: United States Asia Pacific North America India Virginia
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