Nov 22 2004
Berry Plastics Corporation has entered into a series of agreements with Southern Packaging Group Ltd., and its principal shareholder, Mr. Pan Shun Ming to jointly expand participation in the plastic packaging business in China and the surrounding region. The first of these agreements is a letter of intent to enter into an 80% Berry owned and 20% Mr. Pan (or affiliates of Mr. Pan) owned joint venture to produce products for the Chinese market and for export. The second principal agreement is an arrangement pursuant to which Berry has acquired a 10% stake in Southern Packaging as a result of Southern Packaging's successful listing on the Singapore Stock Exchange.
The proposed new company created by the joint venture will be governed by a board of directors consisting of four members appointed by Berry and one member appointed by Mr. Pan. The joint venture will begin with a state-of-the-art building supplied by Mr. Pan or his affiliates. Molding equipment and systems will be installed as needed by customer demand.
Ira Boots, President and CEO of Berry Plastics Corporation, stated "Purchasing an equity position in Southern Packaging and creating a joint venture company with Mr. Pan in China enhances Berry Plastics' global abilities to service our customers and create value for our investors. Mr. Pan has been a business visionary in China for over 20 years and brings the necessary experience to assure success in today's changing business climate. Our equity position in Southern Packaging, one of China's leading plastic packaging suppliers, will tap the many opportunities afforded to provide increased services and products to both company's customers. These two agreements are important to Berry in our quest to be the leading global plastic packaging supplier."
Mr. Pan, the principal shareholder of Southern Packaging, stated "Berry Plastics has gained rapid growth in the past 30 years. With their global strategic vision, strong MNC customer base, advance technologies and facilities, professional management team and shareholding backing from two giant investment banks, there is no doubt that Berry will become one of the largest packaging groups in the world. We have the honour to be the strategic partner in the Asia Pacific Area for Berry Plastics, and will certainly consider further business opportunities together".
Wei Xiao Kang, Executive Director and Deputy Chief Operating Officer of Southern Packaging, led the equity injection investment by Berry Plastic into Southern Packaging and will also be responsible to explore any potential future cooperation opportunities. He stated that "Berry Plastic has a lot of expertise in injection moulding, thermoforming moulding and printing technologies. We believe that Southern Packaging's MNC customers and quality customers in China and Asia Pacific Region will welcome the news that Berry Plastic will become the strategic partner of Southern Packaging".
Goldman Sachs Capital Partners and JPMorgan Partners, both major investors in Berry Plastics, have taken an active role in helping Berry reach these agreements. Joseph Gleberman, Chairman of the Board of Berry Plastics and Managing Director of Goldman Sachs stated "We believe that Berry's new relationship with Mr. Pan and Southern Packaging will accelerate our ability to improve service to our global customers, in China as well as in North America and Europe."
Tony Gabriele, Vice President of the International Business Division of Berry, will oversee the development of the joint venture and Berry's stock ownership of Southern Packaging. Tony Gabriele stated "The agreement with Southern Packaging will enhance the ability to grow our business in the Asia/Pacific region, as well as provide a platform to respond to the ever-growing domestic market in China. Additionally, it will provide us with the capability to address the needs of our global customers, as we strengthen our strategic partnerships worldwide."
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