RICHMOND, Va. (AP) -- Packaging company MeadWestvaco Corp. said Wednesday it is investing about $480 million to grow its corrugated packaging business in Brazil.
The Richmond company said it is expanding operations at its subsidiary Rigesa, in order to meet growing customer demand in South America. MeadWestvaco is developing its existing Santa Catarina facility, including the installation of a new paperboard machine that will double the capacity of its Tres Barras mill.
"The strategic decision to expand our Rigesa business signifies our strong commitment to continued growth and market leadership in Brazil," CEO John A. Luke Jr. said in a news release.
Brazil's emergence as an "economic powerhouse" makes the investment "logical and attractive," Luke said.
The company said the investment will be funded through a combination of internal and external sources.
Separately, MeadWestvaco increased its quarterly dividend to 25 cents per share, from 23 cents previously. The dividend is payable on Dec. 1 to stockholders of record on Nov. 26.
Construction and installation of the new paperboard machine in Brazil is expected to be complete by mid-2012. MeadWestvaco said the machine will produce 300,000 metric tons per year of kraft linerboard for use in the company's packaging converting operations throughout Brazil.
When the mill is fully operational, it is expected to employ about 800 people.
MeadWestvaco, which operates in 30 countries and has customers in more than 100 nations, has served the Brazilian market through Rigesa since 1953 and currently employs more than 2,500 people in Brazil.
The company has gone through a deliberate transformation over the last several years from a mill-centric paper supplier to global partner for brands like Procter & Gamble, Coca-Cola and Walmart. MeadWestvaco said the changes have helped build a company that is more global, innovative and focused.
Rigesa provides packaging for the food, cleaning, cosmetics, health, chemicals and electronic markets. It operates two paper mills, four corrugated packaging plants, one consumer packaging plant, and owns 54 thousand hectares of forestry.