The WhatPackaging? weekly round up

By 19 Nov 2022

WhatPackaging’s Charmiane Alexander, Abhay Avadhani and Disha Chakroborty, spot five headlines - Manjushree, Heidelberg, Smurfit Kappa, WestRock, Cosmo - which are making waves during the week.

The Weekly Column by Abhay Avadhani, Charmiane Alexander and Disha Chakroborty

1. Manjushree to transform nonwoven market
First things first. A.Celli will provide spunmelt nonwoven treatment solutions to Manjushree Spntek. The company which is based in south India chose A.Celli Nonwovens for the supply of a new medical spunmelt treatment line, rewinders and an automated packaging system for their Bengaluru-based greenfield plant.

The company press note said, "Manjushree Spntek acquired a complete turnkey line for the treatment of nonwoven dedicated to the medical industry, including a non-stop shafted unwind stand and an E-wind stream in-line automatic winder with in-line slitting. All this combined with an A.Celli E-wind Rapid-K rewinder and an R-Way automatic packaging line characterised by horizontal and vertical radial wrapping systems equipped with automatic foam application."

The medical treatment line, designed to process spunmelt fabric with a width of 3600 mm and basis weight from 20 to 80 gsm at 150 m/min, along with the other A.Celli solutions, will be delivered to the Indian plant at the end of October 2022.

2. Packaging boosts Heidelberg 
German-based Heidelberger Druckmaschinen AG continued its strong start to the year in the second quarter and has improved its sales and result for the first half-year. Partly due to the exchange rate situation, for instance, sales climbed to USD 670 mn in the second quarter (previous year: USD 560 mn). At USD 1240 mn, sales for the first half-year are approximately 14 percent up on the previous year.

The Packaging Solutions segment enjoyed particularly strong growth, from USD 430 mn in the previous year to USD 550 mn. Due to the higher sales, EBITDA improved to USD 70 mn in the second quarter. This far exceeded the previous year’s figure of USD 40 mn, which was adjusted for non-recurring income.

Heidelberg stands by its forecast for the financial year 2022/23. The company continues to expect sales figures to increase to around USD 2.3 bn (2021/22: USD 2.183 bn).

3. Bumper sales at Smurfit Kappa 
Sales boost for Smurfit Kappa Group has released a trading update for the nine months to 30 September 2022, which shows a major jump in revenue for the paper-based and corrugated packaging manufacturer. Smurfit Kappa, which employs around 48,000 staff, saw its business achieve revenue growth of 33% to (USD 10 bn) in the period, and EBITDA growth of 43% to USD 1.8 bn, with an EBITDA margin of 18.2%.

This summer, Smurfit Kappa completed an USD 11.85 m investment in sustainability at its Zülpich Paper Mill in Germany. Earlier in the year it had unveiled a water-resistant sustainable paper and became the world’s first packaging company to become vegan certified. Smurfit Kappa has over 350 production sites across 36 countries.

4. WestRock To sell ownership interest in RTS Packaging
Sonoco Products Company announced it has entered a definitive agreement to purchase the remaining equity interest in RTS Packaging, LLC from joint venture partner WestRock Company and one WestRock paper mill in Chattanooga, TN, for USD 330 million in cash, subject to customary price adjustments.

The valuation is approximately 6.6x adjusted  EBITDA without synergies and 5x adjusted EBITDA pro forma for synergies. Sonoco also anticipates that it will be able to achieve USD40 million of tax benefits from the transaction. Upon completion of the transaction, Sonoco will own 100% of RTS, formerly operated as a joint venture between Sonoco (35% ownership interest) and WestRock (65% ownership interest).

RTS Packaging was formed in 1997 as a joint venture that combined the former protective packaging operations of WestRock (formerly known as Rock-Tenn Company) and Sonoco to market solid fiber partitions from 100% recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals.

5. Cosmo outperforms in spite of pressure on margins 
Cosmo First has shared  its financial results for the quarter ended September 2022 and it has outperformed the environment.

The highlights are: Cosmo's BOPET line was commissioned two days before the end of Q2. Like BOPP, its focus has been to rapidly develop value-add and speciality products. Despite drop in this quarter earnings, the company's financials remain strong with annualised ROCE and ROE at 25% and 32% respectively.

Due to the commissioning of several new production lines in India within a short span coupled with subdued order flow from overseas customers (geo-political crisis, supply chain corrections, and currency fluctuations) it led to disruption of overall demand supply scenario as well as the margins. Impact on Cosmo was minimal as its strong and growing portfolio of speciality films is least prone to competitive pressures.

Margins were also under pressure in the overseas subsidiaries due to increase in raw material costs, weakening of foreign currencies against US dollar particularly in Japan and Korea. And even though the near-term outlook for non-specialty films could be challenging, from the look of it, "Cosmo will continue to expand on specialty films growth."

vinsak

 

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