Baosteel, an affiliate of China Baowu Steel Group, has obtained approval to acquire a majority stake in CPMC Holdings, the second largest metal packaging company in China. As a result, Baosteel will become the leading can manufacturer in the country.
The Kitt Green plant, located in Wigan, will be the site of this pioneering project. This plant, one of Europe’s largest food processing plants, produces approximately a quarter of a million tons of food per year and employs around 850 people. The proposed hydrogen plant, with a capacity of 20 MW, will cover more than 50% of the plant’s annual natural gas demand and reduce its carbon emissions by 16,000 tons per year.
Hydrogen production will be carried out by means of an electrolyzer, using electricity generated from renewable energy sources, mainly wind and solar energy. This project will not only contribute to emissions reductions, but will also drive Kraft Heinz’s efforts towards its global goal of zero net emissions by 2050, with a 50% reduction in emissions by 2030.
Chinese regulators have given China Baowu Steel Group the green light to acquire a majority stake in CPMC Holdings, the second largest metal packaging company in the country. This move puts an end to ORG Technology’s attempt to take control of its smaller rival.
Last December, CPMC disclosed that Champion Holding, a subsidiary of Baowu, would buy all of its shares at HKD 6.87 (88 cents) per share or up to a total of HKD 7.65 billion (USD 978 million). Although ORG Technology, also interested in the acquisition, submitted a public offer, it did not comply with a binding agreement. This consolidation could reduce competition in the metal canning industry and increase profitability.
In the first nine months of last year, Baosteel Packaging’s revenue declined 6% to 5.8 billion yuan, while net profit fell 4% to 202 million yuan. On the other hand, ORG posted revenues of 10.7 billion yuan, down 1%, but its net income rose 30% to 706 million yuan.
Baosteel Packaging [SHA: 601968] shares rose 10% in Shanghai today, closing at CNY4.90 (70 cents) each. CPMC, founded in 2007, went public in 2009. The company manufactures tinplate, aluminum and plastic containers for food, beverages and personal care products. Last June, state-owned food processing giant Cofco became its largest shareholder with a stake of close to 30%. ORG ranked second with 24%.
In the first half of last year, CPMC reported 5.3 billion yuan ($736.3 million) in revenue, up 1% year-on-year, and its net profit rose 2% to 273.3 million yuan ($38 million). This agreement marks a milestone in the consolidation of the metal packaging industry in China.
Eric Adams, director of Hydrogen Projects at Carlton Power, said: “We are delighted to be working with Kraft Heinz to progress the creation of a green hydrogen facility at Kitt Green, helping the company to decarbonize its operations. It is vital that projects such as this support UK businesses, especially in the manufacturing sector, to reduce their carbon emissions and reach the goal of net zero emissions.”
On the other hand, Jojo Lins De Noronha, president of Kraft Heinz for Northern Europe, said: “Our agreement with Carlton Power is an important step in our efforts to reduce carbon emissions and reach our global goal of zero net emissions by 2050. This project will enable us to move towards a more sustainable and responsible future.” concluded.
