Dateline Southeast Asia

Tetra Pak to make packaging closures at new $26m East Asia plant

By RJ Whitehead

- Last updated on GMT

Tetra Pak to make packaging closures at new $26m East Asia plant
Prompted by a market that is showing signs of substantial growth, one of the world’s leading food packaging companies will invest US$25.6m to build a plant to manufacture packaging closures in Thailand.

Swedish food processing and packaging solutions major Tetra Pak said that the plant would tap into the fast-developing closures market, which is forecast to have risen by more than 30% between 2015 and 2018 in eastern Asia and Oceania. 

The plant will be built within the company’s existing straws and strips complex in Rayong, and is expected to become operational in early 2018. With a production capacity of more than 3bn units per year, Tetra Pak says the new plant will supply the region with locally produced closures for the first time. 

With this new facility we will be able to provide our customers with a wider portfolio of Caps and Closures, with shorter lead time and enhanced quality, efficiency and flexibility​,” said Michael Zacka, Tetra Pak’s regional vice-president. 

The announcement comes two months after Tetra Pak announced a US$106.5m investment in a new regional packaging material manufacturing facility in Vietnam, to build the company’s manufacturing footprint in Asia, alongside existing production facilities in Singapore, India and Japan. 

We are extremely positive about the growth outlook in our region and are quite confident that the new Closures plant will help us open many new opportunities​,” said Zacka. 

More stories from Southeast Asia…

Ifad grants Indonesia its biggest development loan in fund’s history

The International Fund for Agricultural Development (Ifad) has signed an agreement with Indonesia’s government to launch the biggest project in the fund’s 40-year history.

Ifad

Ifad’s US$98.5m loan and US$1.5m grant will fund a rural development project in the country that will greatly improve access to water for irrigation for up to 24m smallholder farmers. US$600m of the US$853m project will be financed by the Asian Development Bank.

With declining rural infrastructure, diminished access to land, and high transport and logistics costs, Indonesian smallholder farmers are facing a number of challenges. They also suffer from difficulty in reaching markets, and vulnerability to erratic weather patterns and lack of rainfall due to a changing climate.

Indonesia has set ambitious targets related to food security and inclusive development in rural areas. This investment will contribute greatly towards supporting Indonesia to achieve its goals​,” said Ron Hartman, Ifad’s country director. 

By establishing a policy that allows smallholder farmers to help design and manage large investments in irrigated agriculture, there will be stronger and more sustainable results​."

It is hoped that the project will improve farm productivity by providing a range of support options that include knowledge sharing between farmers and better storage and access to high-quality seeds. 

It will also establish better access to financial services, prioritise innovation in local value chains and encourage partnerships with private suppliers of agricultural inputs. Farmers will be in charge of managing the irrigation systems to ensure that access to water is  equitable and that maintenance costs and responsibilities are shared.

In the first phase, the project will cover 16 provinces in Sumatra, Java, Kalimantan, Sulawesi and Nusa Tenggara, with approximately 1,800 irrigation schemes covering a total area of almost 2m hectares.

Thailand opens up to Korean investment

Thailand’s prime minister has made a personal plea to Korea in a bid to woo companies to invest in his nation.

Korea

At a time when Asean countries are jockeying for economic position after the Asean Economic Community was formed a year ago, Prayut Chan-ocha said that Thailand held the upper hand in attracting development opportunities, not least because of its access to neighbouring countries.

By bolstering strategic co-operation with Thailand, Korea could make inroads into Asean markets—and especially the four underdeveloped ones of Cambodia, Laos, Myanmar and Vietnam.

"I hope that you will use Thailand as your gateway to Asean​," Prayut said. "Most importantly, I do hope that you will see Thailand as your vital partner to serve vibrant [neighbouring] markets​."

"Thailand's geographical location with most of its borders connected to neighbouring countries as well as strong economic fundamentals and political stability could serve as a dynamic gateway for trade between Asean nations… and a hub for the global value chain​."

As Asean’s fifth-biggest trade partner, Korea could play an important role in the bloc’s economic integration by sharing its expertise, said the Thai dictator.

"Korea could play the role of an in-kind contributor for ASEAN economic integration by enhancing collaboration in areas of mutual interest and complementary advantages​," he said.

"Korea's experience of innovation-led rapid growth will provide extensive knowledge and further deepen Asean and Korea friendship and cooperation​," he said.

Related topics: Processing & Packaging, Emerging Markets

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