January sales are commonplace in the retail world as consumers clamour for bargains to start their new year. It seems that companies within the plastics packaging world were also out for a New Year bargain to see in 2017, with a raft of acquisitions taking place.
Speciality label, security and packaging supplier CCL Industries confirmed the proposed $1.13 billion purchase of Innovia Group in a deal that chief executive Geoffrey Martin believes will propel his firm to world leadership in the fast-growing polymer banknote market, while strengthening its materials science offering with proprietary BOPP films technology.
While that deal is set to be completed during the first quarter of this year, another acquisition in the flexibles world saw Dutch private equity firm Egeria secure Clondalkin Flexible Packaging for an undisclosed sum, bringing to an end 12 years of ownership by Warburg Pincus. With yearly sales of €350 million ($365m) Clondalkin operates 11 manufacturing sites across Europe making stand-up pouches, shrink sleeves, barrier films, skin films and biodegradable films.
It’s a popular time for flexible M&A activity it would seem, as Avery Dennison agreed to buy Hanita Coatings, a pressure-sensitive materials manufacturer of speciality films and laminates, from Kibbutz Hanita Coatings and Tene Investment Funds for $75m. And DS Smith acquired Parish Manufacturing as it seeks to expand its North American flexible packaging and bag-in-box business.
Film converting equipment maker Deacro Industries, meanwhile, was bought by private equity company Spell Capital Partners for an undisclosed sum. Spell Capital Partners attributed the growth of the flexible packaging industry as the motivation for the buy.
Creating a meaningful presence outside of Europe is the plan for RPC Group with its near $100m purchase of South African rigid and flexibles manufacturer Astrapak. RPC sees the market in Sub-Saharan Africa as a major platform for future growth.
Back in Europe, RPC is entering what it calls a high-added-value polymer segment with the purchase of ESE World BV from Stirling Square Capital Partners for $273m. ESE claims to be Europe’s largest ‘pure play’ temporary waste storage provider with regional and pan-European brands. Its footprint comprises two facilities, one each in Germany and France.
In other deals, converter Axium bought fellow French business Lapac to strengthen its injection moulding footprint with lids and flip-top caps for the cosmetic and personal-care industries, US firm Bunting Magnetics acquired UK-based equipment maker Master Magnets, Speyside Equity Fund purchased US-based blow moulding components manufacturer Western Industries from Graham Partners, and distribution and outsourcing group Bunzl acquired two businesses in the UK and US: Woodway of Northampton, UK, and Packaging Film Sales (PFS) of Colorado, USA.
Spanish company Aimplas started the year by instigating a recycling project for post-consumer plastics that it hopes will allow the recovery of more than 100,000 tonnes of waste. Called Life Ecomethylal, the project will divert waste from landfills to obtain methylal, a substance that can be used as a solvent or as a raw material to produce new plastics.
There was a dearth of bioplastics news at the start of 2017 but Italian Intellectual Property Company (IPC) Bio-On SpA did sign a multi-license contract worth €55m ($57m) with a multinational company as the latter plans to replace conventional plastics with biodegradable biopolymers made from agro-industrial waste within the next three years.
In China, chemicals producer China XD Plastics Company has commissioned its Sichuan campus, which will add 300,000 tonnes of polymer composites production to domestic capacity for a total output of 690,000 tonnes. It is targeted predominantly at the automotive business but the company said it is keen to diversify into biodegradable materials and food packaging.
The major part of a €2m ($2.1m) expansion has been completed by Schur Flexibles Moneta in Slovakia, which is responding to a surge in regional demand, while Amcor Rigid Plastics is investing $40m in the expansion of its Ohio, USA, facility to meet an increase in demand for its diversified products packaging.
It may only be the start of 2017, but colour trends for next year have already been released by Clariant and PolyOne. Chemicals firm Clariant is predicting a dark 2018 characterised by a feeling of fear and distrust of the conventional world. Colours will be toned down and a little grey.
More optimistic hues are expected by PolyOne in its InVisiO Color Inspiration collection for 2018, which cites four colour palettes that reflect a world of political and social tensions.
Whatever 2018 brings, brands will be hoping that their products shimmer and shine on retail shelves.
The view from the back
Political and financial events are often unpredictable, even to those who try to shape them. They can also be bewildering to onlookers trying to figure out what is happening. The unexpected ways in which societies can reverse their thinking has led to a new breed of analysts tasked with attempting to explain the inexplicable. Hardly surprising, as many of these analysts are the very people who incorrectly predicted the outcomes that they subsequently try to elucidate.
As you may, or may not, have predicted, this leads me to a subject that attracts considerable emotive comment; single-use plastics bags. You either love them or loathe them. You want them with you when you shop or you want to ban them. Whichever viewpoint you hold, the way in which the world is moving suggests that plastics bag bans are becoming a norm that will not be reversed.
In many ways this is sad, for single-use plastics bags are an inspired design offering a flexible sterile package that is moisture-proof and uses a minimal amount of materials. There are, however, problems resulting from their indiscriminate disposal and a general failure to recycle them that have contributed to environmental issues.
The recent advance of plastics bag taxes and bans has turned into a race that is often used by legislators to enhance their personal green credentials.
When a politician speaks about plastics bags it is invariably a precursor that marks the beginning of the end. But something very strange has happened in one of the US states – something that could give the plastics industry breathing space to seek a real solution.
During the last week of 2016, Michigan passed into law a bill prohibiting individual cities and municipalities within the state from banning plastics bags or charging customers a fee for using them. It is a ban on bans!
I doubt if there are any analysts or readers outside of Michigan (myself included) who saw that coming.