Page 29 - Packaging News Magazine July-August 2018

July-August 2018
www.packagingnews.com.au
FLEXIBLES UPDATE
29
www.mespic.com
Pro-Pac gathers speed on the acquisition trail
ASX-listed Pro-Pac Packaging Group (PPG)
will raise $59.8 million to buy Victoria-based Perfection Packaging and NZ company Polypak.
PRO-PAC has agreed to pay $49.8 million for flexible packaging manufacturer Per- fection Packaging, which employs 100 staff at its 6000 square metre factory in Dandenong South in Melbourne. Polypak, a soft flexible packaging manu- facturer and distributor based in Auck- land, will be acquired for $NZ8.8 million.
“The acquisitions of Perfection Packag- ing (Aust) and Polypak (NZ) represent a significant milestone in PPG’s vision to
become the flexible and industrial packaging manufacturer and distribution leader in Australia and New Zealand,” PPG chairman Ahmed Fahour told the ASX.
Principals of Polypak and Perfection Packaging will stay on with PPG and integrate into PPG leadership and operations teams.
Perfection Packaging, established in the 1970s, has a forecast production of 80 million metres a year of printed laminate ‘hard flexible’ primary packaging. Its manufacturing infrastructure was expanded earlier this year to now include five printing presses, three laminators, and five slitters.
Polypak, established in 1978, is a specialist soft flexibles packag- ing manufacturer and distributor of high-quality polyethylene bags, film and tubes, supplying mainly primary food processors including meat, poultry and fish markets via its production plant in North Harbour, Auckland, where it employs 28 people.
PPG says the acquisitions will: provide an entry into the larger hard flexibles segment; deliver significant cost synergies to con- solidate its Australian manufacturing network; open access to new
markets and products complementing the existing business; in- crease the diversification of revenues, geographies and customers; and strengthen PPGs leadership and operations teams.
In September 2017, PPG signed a $177.5 million merger deal with flexible packager Integrated Packaging Group (IPG), the third-big- gest flexible packaging manufacturing company in Australia. The combined business was projected to have annual sales of more than $450 million.
In a trading update in early July, PPG said it expects to generate earnings before tax of between $34m-$35m in FY18, and between $46m-$47m in FY19 – subject to no adverse market conditions.
“The FY18 year has been a period of substantial transformation as the company establishes itself as a leader in the industrial and flexible packaging sector,” PPG CEO Grand Harrod says.
“The company is now very well advanced in the integration of the IPG acquisition it completed recently and will further benefit from both synergy savings and new growth opportunities with the Perfection Packaging and PolyPak acquisitions. Both acquisitions further strengthen our growth strategy, in particular our reach into the higher growth food based primary packaging market.”
The acquisition of Perfection Packaging is scheduled to be com- pleted on 6 September. ■
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ABOVE: Perfection Packaging has a forecast production of 80 million metres a year of printed laminate ‘hard flexible’ primary packaging.
TOP: Grant Harrod, CEO PPG: “FY 18 has been a period of substantial transformation.”