2010 Business Outlook: Flexible Packaging Converting & Markets
Your guide to what's ahead in taxes, sustainability, food safety, M&As, material supplies and the expected US economic recovery.
Mark Spaulding -- Converting Magazine, 10/12/2009 2:58:00 AM
Bigger and fewer
This summer's Bemis purchase of Alcan Food Americas notwithstanding, the 2008 economic collapse and resulting tight money supply has halved the volume of packaging mergers and acqusitions from 2007 levels, says Doug Lawson, managing director of BMO Capital Markets. But there remains compelling rationale for continued industry consolidation. The drivers: Economies of scale, high fragmentation in individual packaging sectors, the ability to leverage relationships with large, multinational customers, enhanced service and R&D capabilities, purchasing synergies and access to cheaper capital. Based on past experience, look for further purchases by Sigma Plastics, Clondalkin, Mondi, Ampac and others.
Resin take-aways
Nothing fluctuates as much as crude-oil prices, still, there are some reasonable projections that can be made of film resins, says Nick Vafiadis, director-polyethylene-North America for Chemical Market Associates. PE prices should be less volatile through 2010 than in the recent past, and overcapacity will remain into 2013. Globally, "polypropylenes price may now be reaching a tipping point," he says, and overcapacity will ensue. PP prices in North America, however, will stay elevated.
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