The international trend of the plastics industry promotes mergers and acquisitions and highlights globalization

Although 2015 was not a record year for M&A transactions with plastics companies, it was quite close to the new record.

The international trend of the plastics industry promotes mergers and acquisitions and highlights globalization

Tom Blaige is the CEO of Chicago's Blaige, which facilitates mergers and acquisitions in the plastics, packaging and chemical industries. At the recent 2016 Plastic Capital and Mergers Conference, he pointed out that there were 523 transactions related to the plastics industry last year, which was only less than 536 in 2014 and 540 in 2010. In 2001 and 2002, the number of transactions was only about 200.

He said: "The increase in the number of transactions is mainly from cross-border activities, and has little to do with the United States, most of which are transnational transactions."

Not only did the overall number of transactions rise sharply, but the number of transactions in the packaging industry increased from 71 in 2001 and 50 in 2002 to 164 last year. The 2016 Plastic Capital and Merger Conference was organized by Plastics News.

Transactions in other market segments of the plastics industry, including industries and raw materials, have also increased rapidly over time.

Global mergers have brought "squeezing" between plastic packaging manufacturers. This extrusion has also been transmitted to upstream raw material prices and downstream customers, but globalization has also brought opportunities to packaging companies. Consumer products companies are Look for opportunities to buy and supply suppliers.

Rick Ritter, general manager of Jabil Packaging Solutions (formerly Nypro Packaging), said: "Look at big companies like Coca-Cola or CPG. When they want to act, they want to act quickly. They don't have the resources to help 90,000 suppliers in 15 companies. So if you can bring the same experience to customers around the world, it would be a good opportunity for integration."

While striving to maintain global consistency, global packaging companies need to ensure that local customers are maintained while serving customers.

Jeffrey Kolbow, CEO of MGS Manufacturing Group (manufacturer of tools, molds and equipment systems) said: "We need to consider culture and customs. We must ensure full communication and ensure that all aspects are in place to bring long-term cooperation and consider for our customers. Customers bring benefits. They must go deep into the local area, not always seamless, and need a lot of work to serve the entire company. We must work harder to ensure that customer service is perfect."

Blaige also gave an in-depth explanation of the mergers and acquisitions in the injection molding industry. He pointed out that 61% of the transactions came from strategic buyers, another 39% from investment buyers (such as private equity firms), and 16% were related to holding the plastics industry already held. Shares.

This means that 77% of the transactions come from industry insiders who want to improve their business in the industry.

Blaige added that 51% of transactions are cross-border transactions, 40% are in the US, and 9% are both. And 15 years ago, cross-border transactions accounted for only 30% to 40%.

He said: "This is also the reason for the increase in transactions in developing economies, as mergers and acquisitions are seeking growth and growth is in developing economies."