IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary American Israeli Paper Mills Ltd. (AMEX: AIP; TASE: AIP) has hired McKinsey & Co. to review the feasibility of building a new production system, after the company’s board approved the $140 million outlay. The company is also hiring a management team for the project - the largest paper packaging production line in the Middle East.
The company also hired Finnish paper manufacturer Poyry plc (HEX:POY1V) to advise it on the engineering and technical stipulations for the production line equipment. Galil Engineering Ltd. was hired as the local planning company.
American Israeli Paper Mills CEO Avi Brener said, “We’re hiring skilled managers with the know-how and experience to successfully lead the setting up a recycled paper production line, which is the most advanced and complex project in the company’s history.”
American Israeli Paper Mills says that it currently produces 300,000-330,000 tons of paper products annually, including 150,000 tons of packaging materials. The production line will boost production to 500,000 tons a year, and replace paper packaging imports. The production line will recycle carton and newsprint, boosting paper recycling in Israel by 50%. The company expects the new production line to take two years to set up.
The company predicts that the large increase in production capacity will substantially boost its long-term competitiveness and profitability. The new production line is intended to meet Israel’s growing demand for packaging, while reducing imports. The fibers for the production line will come from waste paper and carton collected by subsidiary Amnir Recycling Industries Ltd.
The project manager will be Shimon Biton, who was hired after four years experience with similar projects in South Africa and Russia. Nine sector managers will also be hired.
Published by Globes [online], Israel business news - www.globes.co.il - on March 5, 2007
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