Acquisitions on the cards

When Michael Cronin took part in the Converting Forum (see Converting Today January, page 22) he reported that the last 12 months had been the toughest he had experienced for the company. "Demand is going to be flat and prices squeezed. But we'll invest," he predicted. Indeed, several new presses have been announced during the first quarter (see page 7, this issue). He was speaking as the managing director UK and Ireland Alcan Packaging, Lawson Mardon.

In an exclusive interview during Interpack just a few months later and having been promoted to president, Food Flexibles Europe, Alcan Packaging Lawson Mardon, he talked of his strategic role across the 14 business units (in nine geographic locations) under his wing. "Our model has been and is to grow organically rather than by acquisition. Alcan has seen packaging as a platform for growth. But where we can add value – share holder and customer value – we will and are looking at acquisitions," he announced.

"Our strategy is to focus on major food customers – that is to say focus the plant on the customer. The business teams live and breathe with the customer. They are aware how their business is at any time.

"Most of our biggest customers accept us as a partner in the true sense of the word." What did that mean? "It is based on us supplying their packaging needs. There is a big difference between supplying packaging and supplying packaging needs."

But how did the company cope with the squeeze on prices and profitability? "Our drive has been to push costs down as hard as we can, reinvest at a sustainable level and maximize the return on that. If we are not putting money into the business we will not be as efficient as we could be. I believe we are efficient and that we have people who are genuinely passionate about efficiency."

In what ways does the company meet the customer needs? "Take for example our R&D. Our global spend is just short of three per cent of turnover. We have a research centre constantly being accessed by the customers. We do many different trials – to determine shelf life, for example.

"We have businesses who know their customers' forecasts, for example. So we can ensure the packaging is there when it is needed. And this is valued. I stress value rather than price. We also offer global service (with the exception of Asia)."

Where is the growth needed? "We have identified the white space in terms of both geography and products," he replied. But the company is likely to be sticking with paper, film and foil, and three dimensional added value converting such as pouches. "We have had the Ceramis coating (SiOx) facility for some time and have upscaled it to make it wider and faster. We are still on track with that barrier strategy."

Geographically the company has recently announced a major enlargement at its plant in Spain. "We were really land locked there so we are building a plant twice the size and will be expanding our gravure capability. That gives us an opportunity to grow the business." He added: "Southern Europe is growing like mad and we have efficiency combined with competitive labour rates and skill."

What about Eastern Europe? "We have to follow our customers into this region. Where they go we will go."

"And we have to look for new formats of presentation, at ways of providing packaging that is the product, new delivery systems. Snacking on the move needs packaging delivery systems. I believe that is where the future lies," he concluded.