The Chinese business makes food flexible and pharmaceutical packaging and employs around 1,200 people. It has been owned by Alcan since the acquisition of VAW Flexpac in May 2003.

"This investment is further evidence of our commitment to the dynamic Chinese market - a region in which we are looking to continue to make investments in the coming years," said Christel Bories, Alcan president and CEO.

Terms of the transaction were not disclosed.

China's rapidly growing consumption of packaged goods has created one of the fastest-growing markets for packaging machinery in the world. Demand is forecasted to grow 8.6 per cent annually to 35.9 billion yuan (US$4.4 billion) by 2009, according to market researchers at Freedonia.

Alcan will be looking to meet rising demand for beverage packaging fuelled by the growth of both the soft beverage and beer industries. The China beer market will soon become the largest by volume in the world, whereas the consumption of soft drinks, although still tiny by world standards, is currently growing at the fastest rate of any market in the world.

Propack generated sales worth US$90 million in 2004 and also serves international customers. It has manufacturing sites in China's major metropolitan areas: Beijing, Jiangyin, Huizhou and Chengdu.

Patrick Cheung, Propack's founder, will continue as president and managing director of the company.