Smurfit Kappa is planning to build a €35 million packaging plant in Morocco

Irish packaging giant Smurfit Kappa will build a new plant in Morocco, creating up to 300 local jobs.

Construction of the 25,000 square meter facility started this week. It is scheduled to go online in 2023 and cost over 35 million euros, Smurfit Kappa said.

The plant will supply local customers in the industrial, agricultural, food, automotive, pharmaceutical and ceramic sectors.

Growth in Smurfit Kappa’s core corrugated business was 3.6 percent in the first three months of the year, with Europe growing 3 percent and the Americas growing 6 percent.

It comes after a significant pandemic surge in online shopping, which has increased demand for packaging around the world.

Demand for corrugated packaging is currently outstripping supply in the Moroccan market, Smurfit Kappa said in a statement on Wednesday.

Saverio Mayer, chief executive of Smurfit Kappa Europe, said the new facility is “the first of its kind owned by the company in Morocco”.

“It will be located in an area with significant growth potential and will create 300 direct and indirect jobs in the region.”

Edwin Goffard, Chief Operating Officer of Corrugated and Converting, Smurfit Kappa Europe said the plant will be built at the right time and place.

“There is continued high demand for corrugated and customers want to know that their products are being transported and presented in the most efficient and sustainable way.

“We use the enormous wealth of data from working with over 65,000 customers worldwide to find the best solution for the task at hand.”

Smurfit Kappa employs around 48,000 people at over 350 locations in 36 countries.

The company reported sales of 10.1 billion euros in 2021, with sales up 33 percent to more than 3 billion euros in the first three months of 2022 and a profit of 514 million euros.

The group reported improved margins of 17 percent for the first three months of the year versus 16.6 percent in the last quarter of 2021, despite rising input prices and global inflation.

The company said last year that Covid had accelerated its strategic plans. In 2020, the company raised €660 million in fresh equity to invest in new capacity to capitalize on online shopping growth fueled by pandemic lockdowns.

The group recently completed the acquisition of Argencraft, a corrugated board plant in Buenos Aires, Argentina.

On April 1, Smurfit Kappa announced its intention to exit the Russian market amid mounting pressure on global companies to cut ties with Moscow following February’s invasion of neighboring Ukraine.