News

Chesapeake has won a major contract to provide printed materials for a new weight-loss drug, due to be launched in Europe in 2008.

The US-based group's UK packaging arm, Field Boxmore, will handle the work, according to Field Group communications manager Bob Houghton.

Chesapeake president and chief executive Andrew Kohut said the firm's branded products division had also obtained "significant commitments" from customers for new business beginning in the first quarter of 2008 that would "help offset the decline in tobacco packaging".

This decline is the result of the loss of a major global contract with British American Tobacco (BAT), which accounted for around 8% of Chesapeake's paperboard packaging revenues in 2006.

Kohut's comments came as the group reported its third-quarter results.

The firm achieved "solid" earnings growth in its plastics packaging division in the third quarter as it benefited from global cost-cutting measures.

The division's net sales of £21m ($42m) were 19% higher than the same time last year, taking into account exchange rate fluctuations. The increase was driven by higher sales in Chesapeake's South African beverage business and passing on higher raw material costs.

However, the paperboard division's net sales of £113m were 2% down on last year after accounting for exchange rate changes.

Total sales rose 7% to £133.2m and profit from continuing operations was £1.8m.

Kohut said the firm was positioning itself for future growth by expanding into additional markets.

The plastics division opened a Hungarian factory ahead of schedule in the third quarter to produce HDPE and PET containers for agrochemical customers.

The division's business in Africa also provided growth opportunities, he added.

The firm has also opened a new paperboard packaging plant in China that offers advanced security and anti-counterfeiting capabilities.