The USD one-trillion packaging biz

Mergers are here - and they are knocking on Indian doors. One thing is sure, the packaging business in India will be less fragmented in the future

12 Oct 2018 | By Rushikesh Aravkar

There is money in the packaging industry. Everyone knows this truism. Which is why all eyes are on Essel Propack. Reportedly, Huhtamaki and Amcor are engaged in negotiations with the promoters of Essel to buy a controlling stake in the company. Essel, with 70% global market share, is the world’s largest manufacturer of lamitubes. It has 20 manufacturing sites across 11 countries. It clocked a turnover of over USD 368-mn in FY17.

Meanwhile, Amcor announced the acquisition of Bemis. The deal between the packaging specialists is worth USD 13-bn in revenue.

International Paper remains a big daddy - and is undoubtedly the largest packaging converter in packaging, pulp and paper products. In 2017-end, the packaging major merged its North America Consumer Packaging business with Graphic Packaging (successful deal) and tried to acquire Smurfit Kappa which rebuffed the offer. 

2015 was a year of big deals. And we had mentioned the deal between Rock-Tenn and MeadWestvaco. That was a combined financial clout of USD 9.9-bn and USD 5.6-bn. Today, WestRock Company is a global leader in consumer and corrugated packaging and boasts of net sales of USD 15-bn. Readers will recall in 2015, Ball Corporation acquired Rexam. That was the coming together of USD 8.5-bn and USD 5.6-bn. In 2017, the numbers are USD 11-bn with 17,500 employees at more than 100 locations worldwide.

The question on every packaging lip is, what next?  In 2018, Constantia acquired Kolkata’s Creative Polypack to become third largest flexible packaging company in India. 
Mergers are here - and they are knocking on India’s doors. One thing is sure, the packaging business in India will be less fragmented in the future.

Top Ten - international packaging players
1. WestRock, United States. deals in corrugated packaging segment. WestRock revenues are USD 14-bn.
2. International Paper, USA is a producer of renewable fibre-based packaging. Its India factory is in Rajamundry in Andhra Pradesh
3. Reynolds Group, New Zealand. The revenues are USD 10.5-bn.
4. Ball Corporation, USA - The leading suppliers of metal packaging. Ball has two India factories in India: Navi Mumbai and Ahmedabad.
5. Smurfit Kappa, Ireland - boasts of 370 production sites across 35 countries and revenues of USD 9.93-bn.
6. Amcor, Australia - reports 70% revenue from flexible packaging segment and 30% revenue from the rigid plastic segment.
7. Crown Holdings, USA - the USD 8.6-bn company has deals in steel and aluminium cans. 
8. Mondi, Austria - revenue was USD 8.23-bn which accrued from fibre packaging, consumer packaging and uncoated fine paper.
9. DS Smith, UK - The company’s current year’s revenue was USD 7.4-bn.
10. Berry Group, USA offers nonwoven speciality materials and consumer packaging and has revenue of USD 7-bn.

Also, keep an eye on the next five years – Owens-Illinois (USD 6.8- bn), Packaging Corporation of America (USD 5.3-bn), Sealed Air (USD 4.46-bn), Graphic Packaging International (USD 4.4-bn) and Stora Enso (USD 4.37-bn)