Tues 18th Nov, Park Plaza Westminster Bridge, London

WRAPPING UP DEALS: THE M&A TRENDS SHAPING THE PACKAGING INDUSTRY

Posted on by Neesha Ramsingh-Cleary

Deals have continued apace in the UK packaging industry following the record volumes seen in 2021, according to BDO’s recent Packaging Sector Insights report. The report from the business advisory firm, reveals that 28 packaging transactions have completed so far this year, following a record 52 deals in 2021. Plastic packaging has been the most frequently acquired material over the last four years, representing almost a third (32%) of packaging deals, followed by paper and cardboard materials with 24% of transactions.

93% of deals in the sector so far this year have been by strategic trade acquirers, as businesses consolidate, enter new regional territories, or acquire new product verticals. Publicly traded companies continue to be the most active acquirers, principally of domestic targets, but also of international businesses.

Macfarlane Group made its first acquisition outside of the UK earlier this year, buying PackMann, the German provider of protective packaging products for an enterprise value of £5.8 million. This marks the seventh acquisition for Macfarlane over the past four years, with the previous six all being UK-based assets.

Zeus has also been a serial acquirer, recently buying Swanline Group and sister company BoxMart, suppliers of paper-based gift, retail and ecommerce packaging, which contributed to the company’s £70 million uplift in annual revenues.

A further notable dynamic has been the increase in carve-out transactions, with businesses streamlining operations to focus on chosen growth markets.  MacFarlane, Essentra and Mondi have all reassessed their business models which has led to the strategic disposal of divisions.

Mondi sold its personal care components business to Japan-based conglomerate Nitto Denko for an enterprise value of EUR 615 million in February, enabling the group to focus on growing its core packaging division.  In August, the business sold its Russian operations for EUR 1.5 billion, and swiftly followed this with the acquisition of Burgo Group, the Italian producer and distributor of graphic paper, for EUR 40 million.  There is market speculation that Mondi could make a move to solidify its market position by acquiring a UK rival.

Roger Buckley, M&A Partner and Head of Industrials at BDO LLP, commented: “In such challenging times – with disparate effects across end sectors – M&A activity has been a necessity to expand capabilities, capture synergies, combat supply chain pressures and drive value creation across a fragmented market.  We see deal volumes correlating closely to high attractiveness of the UK packaging sector and the huge opportunities therein.

“Plastic packaging remains a fragmented market, with plenty of consolidation opportunity for acquirers looking to gain economies of scale.  Although paper packaging and diverse materials are becoming increasingly preferred, there is still high demand for plastics due to its versatility, cost-effectiveness, structural properties and ease of print and design.”

The report takes a detailed tour of the areas of focus driving sustainability in the market, including novel advancements that are gaining traction.

Alan Chan, M&A Director at BDO, said: “Governments have imposed policy changes to fast-track the shift to sustainability, making it more onerous for those companies who cannot keep up.  M&A can likewise fast-track the expertise of businesses seeking competitive advantage and position them for a sustainable future.”

Looking ahead, the balancing of different goals will continue to push businesses to innovate and will lead to a more price-competitive and multi-faceted sector.

Chan added: “Based on the inherent attractiveness of the UK packaging sector, we expect the M&A market to remain robust, with strategy shifts contributing to continued corporate activity alongside investor appetite for innovative, sustainable new technologies.”

USEFUL POINTS OF CONTACT OVER THE FESTIVE PERIOD

Posted on by Neesha Ramsingh-Cleary

Whilst we would hope members do not have any major issues over the festive period, we thought it would be useful to share with you a recently published list of Government helplines which you may find useful.

Included are hyperlinks that will take you to pages that provide extra information such as the opening hours for the helpline and what support they can offer.

The list can be accessed here

CUSTOMS DECLARATION SERVICE EXPORTER DEADLINE EXTENDED UNTIL 30TH NOV 2023

Posted on by Neesha Ramsingh-Cleary

HMRC have announced that exporters will now have until 30th November 2023 (rather than March 2023) to move across to the Customs Declaration Service (CDS).

Following consultation with the border industry, this will ensure businesses have enough time to prepare for the change.

After 30th November, businesses will need to use CDS to make export declarations for goods they send out of the UK, as they already do for import declarations.

If businesses have not already done so, they should carry out the following initial steps:

HMRC will provide further information about the timeline for CDS exports by the end of January 2023. Businesses can also provide their preferred email address on GOV.UK to receive updates and notifications about CDS.

 

PUBLICATION OF THE TARGET OPERATING MODEL DELAYED TO EARLY 2023

Posted on by Neesha Ramsingh-Cleary

On 13th December, the Cabinet Office Borders Group hosted an all stakeholder call to update stakeholders on the Border Target Operating Model (TOM) publication timetable.

The call was chaired by Director Tom Smith and Baroness Neville-Rolfe, Minister of State at the Cabinet Office, who is the new Minister responsible for Borders.

The Minister informed stakeholders that she hoped to be able to announce what the Government’s conclusions are early in 2023 which will be followed by a period of engagement with industry.

She also gave an update on the development relating to legislation known as the Transitional Staging Period (TSP). Whilst the TSP was previously extended to 31st December 2022, the Government will not be introducing further import controls on 1st January 2023, and the TSP would now be extended further to 31st January 2024.

Government will now proceed with the relevant legislative process to ensure this takes effect, with England, Wales and Scotland all laying their very own, similar Statutory Instruments with the same date.

The actual dates for implementation of the Border Target Operating Model will be explained in the draft document that is now due to be published in early 2023.The final TOM will be published later, but still in early 2023.

Defra have also indicated that they will build on the summer workshops they ran previously, and further engage with key audiences in the UK and the rest of the world (RoW) to collect feedback when the draft TOM is published.

Regarding the TOM, the Minister outlined the following:

  1. That decisions will be based on evidence and to strike the right balance between making sure the border does its job – for example in ensuring biosecurity and keeping trade flowing.
  2. To ensure we provide industry with clarity, setting out a long-term plan that allows them to plan business and operational changes.
  3. To give businesses the necessary time to prepare for the new model and the need to set out a clear timetable leading to any change.
  4. A strong commitment to the 2025 Border Strategy, working towards a modern border that exploits technology and data, which adopts a fully joined up approach. This would all be underpinned by the Single Trade Window, which is currently in development.

CHRISTMAS CAROUSEL FUN AT SCHOOL THANKS TO OAKLAND INTERNATIONAL

Posted on by hayley.smith@oakland-international.com

Beoley First School in Redditch has enjoyed a jolly Christmas Fayre thanks to local family business Oakland International who generously sponsored the school’s Christmas Carousel.

Headteacher of Beoley First School, Ben Irving, said: “This year was the first opportunity for Beoley First School to come together as a community at Christmas for some time and it was made all the more special by the inclusion of a Victorian Carousel.

“We are enormously grateful to Oakland International for retaining local links and sponsoring the carousel. In doing so they helped us to raise much needed funds for our small village school.”

Having had their head office in Beoley for over twenty-years, total supply chain solutions provider Oakland International has strong community links and is active in supporting a range of educational and community initiatives both locally and further afield via their children’s charity the Oakland Foundation.

Oakland International Depot Manager Luke Attwell commented: “We were delighted to offer our help and it was great to be able to share in all the Christmas fun with the children, staff and parents.

“Christmas is such a wonderful time for giving, and as a local family business we continue to be committed to supporting our local community, so we were delighted to offer our help and support for this festive family event by sponsoring the school’s Christmas Carousel.”

STAR TECHNICAL SOLUTIONS WORK WITH INDUSTRY PARTNERS IN NEW INITIATIVE EXPLORING DECARBONISATION IN THE REFRIGERATION SECTOR

Posted on by Astrid Prado

Star Technical solutions will take part in a research project aimed at investigating energy use and greenhouse gas emissions from the transport, industrial and commercial refrigeration (TICR) sectors in the UK. These sectors that are major users of energy across many businesses will play a critical part in the UK’s net zero agenda. It will explore six subsectors in depth: datacentres, food and drink manufacturing sites, and chemical and pharmaceutical manufacturing, retail, cold stores and transport refrigeration units.

BEIS (the Department for Business, Energy and Industrial Strategy) are funding this research project on the non-domestic cooling sector, to look into trends, emissions and innovation potential of decarbonising industrial and commercial refrigeration.

Its aim is to identify innovation levers to facilitate sector-wide decarbonisation and achieve net zero. The work will run for two years and outputs will include roadmaps, sector-specific guidance, training and a programme of events in 2023/4. It’s roadmaps and strategies for end users will be based on a comprehensive data-driven and whole systems evidence base. These outputs will be used to drive forward sector decarbonisation strategies and policies.

The work is being managed by a consortium of experts led by London South Bank University (LSBU). Catarina Marques, PhD FInstR, Senior Research Fellow in the School of Engineering at London South Bank University and Director of the TICR consortium, said: “TICR will guide the industry on its path towards net zero from both end-user and sector-wide perspectives, providing benefits to consumers such as food/IT/pharmaceutical security and climate change mitigation. Our multidisciplinary consortium will foster long term collaborations between industry, academia and government ensuring that the project outputs are widely disseminated”.

Partners in the project include London South Bank University, Carbon Limiting Technologies, the Carbon Trust, Carbon 3 IT, the Centre for Sustainable Cooling at the University of Birmingham, the Institute of Refrigeration and Star Technical Solutions.

Recognised for their technical expertise in low-carbon refrigeration consultancy services, project partner Star Technical Solution will carry out energy surveys across the different business subsectors to identify areas for improvement. The results will feed directly into the consortium’s research to produce roadmaps, sector-specific guidance and training materials.

Dermot Cotter, Managing Director of STS, said, ‘We are proud to work in partnership with the TICR consortium to accelerate the decarbonisation process in the temperature-controlled storage, food and drink manufacturing, retail, chemical and pharmaceutical sectors.”

“Helping customers take further steps to meet net-zero targets has been a fundamental part of our work over the past 10 years. This adds an extra layer of experience to the team and will allow us to successfully identify untapped energy and carbon reduction areas.”

Stakeholders from Government Departments will be involved including BEIS, DEFRA and the Department for Transport. An advisory board to ensure input from business includes trade associations the Air Conditioning and Refrigeration Industry Board, the Centre for Sustainable Road Freight, Chilled Food Association, Cold Chain Federation, The Data Centre Trade Association and Food and Drink Federation.

A website (www.netzerorefrigeration.uk) will be launched in January 2023 and will contain information about how businesses using cooling technologies and specialists in the sector can get involved in contributing to the research at an early stage. This will include a sign-up for project updates and news, and information workstreams, timetables, reports and tools.

If you have any queries contact project lead Catarina Marques catarina.marques@lsbu.ac.uk

To find out more about Star Technical Solutions, visit https://www.star-ts.co.uk/

IS YOUR WAREHOUSE MANAGEMENT SOFTWARE LIMITING YOUR BUSINESS OPPORTUNITIES?

Posted on by Rob Sherwin

Modern businesses need proper applications to support all aspects of their operations and to exchange information with suppliers and customers. Any business operating in the supply chain will probably see Warehouse Management Software (WMS) as key. But many still rely on systems that do not support easy data exchange and integration with other applications. Could this be limiting their business opportunities?

The ability to work with partners – suppliers and customers – easily and with frictionless transactions is a key part of the modern supply chain. Anything that compromises the swapping and sharing of relevant and useful information not only adds costs and complexity but could also present a barrier to doing business altogether.

Businesses are likely to have invested in specialist applications that are used internally and across their supply chain. These will include sales, accounting, manufacturing management, resource planning, eCommerce, and many more. They will achieve this by deploying applications and technologies at each stage and enabling them to integrate and exchange information with each other. Increasingly this also means the warehouse management or stock control system.

The benefits of WMS for efficient stock management and order processing are generally well established but they clearly offer other advantages in the extended supply chain. When dealing with customers the WMS can provide the real-time stock availability that enhances customer perceptions and helps to drive sales. Several studies have shown that customers make buying decisions based not just on knowing that the item they want is in stock but that it will be delivered to a convenient location at a suitable time. Good WMS enables this through integration with, among others, eCommerce and delivery management applications.

Dealing with suppliers is another area where WMS reduces complexity. For example, suppliers can send advance information about deliveries to be held on the WMS until they arrive. The WMS then uses the information to verify those incoming orders and allocates stock to appropriate warehouse locations to ensure availability for sale and despatch. There is no need for the warehouse team to input data, saving time and removing the potential for rekeying errors. The supplier and warehouse operator also save money because everything is faster and more accurate. This is a basic example, but it is surprising how many businesses still do not do it.

Another example is real-time stock visibility which can help suppliers plan their scheduled deliveries. This is especially useful in retail and manufacturing supply chains where just-in-time (JIT) lead times are short and deliberately designed to be “lean”. Real-time visibility helps suppliers identify what to deliver and by when, to maintain sufficient inventory levels in the warehouse. The supplier can access the WMS via a web interface, or integration with their own inventory application, often using automated triggers to instigate when, for example, warehouse stock levels fall below pre-set thresholds. In scenarios like this the WMS will reflect the genuine situation in the warehouse – the very definition of real-time – and anything that gets in the way has the potential to cause delays and disruption.

Another scenario will be familiar to businesses supplying food, pharmaceuticals, healthcare, chemicals, electronic goods, precision engineering products, and other items that require high degrees of traceability. Here, being able to identify items at the batch, case, or even single pack/item level is not just a business differentiator but can be a matter of regulatory and/or legal compliance. Businesses with this requirement need to be sure that they have – or can access – detailed information about an item at every step along the supply chain so that they can verify its provenance and provide that information when asked. WMS can provide that information for the warehousing and delivery phases if not others as well.

All these scenarios, and many others, can be managed using paper-based systems. But why do it that way when perfectly good information applications are available? While it might be a stretch to claim suppliers will never want to do business, it is not difficult to imagine situations where the complexity and cost of doing things the old-fashioned way would simply make it not worth the effort.

Deploying a WMS therefore offers the ability to work more easily with customers and removes a potential barrier to supply chain collaboration and partnership. The most immediate benefit is internal with all the advantages of accurate and efficient warehouse stock management. For many businesses that would be justification enough but here we are talking about the benefits of data exchange and integration with internal and third-party (customer and supplier) applications. Modern WMS supports this by using APIs (Application Programming Interfaces). These allow applications from different vendors or developers to communicate with little or no additional configuration. This makes it very easy for connected applications to exchange data, especially when it is in popular or common formats.

https://www.principallogisticstechnologies.com/

 

COOK BOOSTS PRODUCTION BY 30% WITH STARFROST MECHANICAL FREEZING SYSTEM

Posted on by Lauren Stephenson

COOK Trading has increased production capacity of its ready to cook meals with the addition of another spiral freezer from mechanical freezing experts Starfrost.

In the 25 years since COOK has been established, the family firm has transformed the ready-meals market with its superior quality frozen ready meals. Inspired by the taste of great home cooking, COOK services the rapidly increasing consumer demand for quality ready to cook food.

With three production kitchens in the South of England, COOK produces over 30 million meals per year which are sold in 90 of its own shops and more than 900 independent stores. The company has experienced rapid and significant business growth in the past three years following the acquisition of new premises and the development of new product ranges.

Having decided to invest in new freezing equipment to support growth, COOK turned to cooling technology partners Starfrost – the companies had previously worked together on an expansion project in 2019.

Starfrost engineering teams custom-built a mechanical freezing system, which has been designed to integrate seamlessly with COOK’s processing line. Since installation earlier this year, the additional Helix spiral freezer has boosted COOK’s total production capacity by 30% across all production kitchens located in Sittingbourne, Kent.

Ben Walker, General Manager at COOK discusses the importance of freezing and the benefits of the newly installed Starfrost spiral freezer: “Choosing the correct freezing process for food products is essential to maintain high manufacturing standards. The freezing process has an effect on processing time and consequently impacts profit margins. It is also key to deliver the consistent product quality we require at COOK.”

“The choice between spiral freezing and blast freezing – a process we had used before, was made following extensive research and product test trials; the conclusion was that the spiral freezer option would facilitate greater efficiencies in the freezing process and provide consistent freezing. It also removed the need for the trolleys that blast freezing requires, reducing the risk of potential accidents caused by moving trolleys around the kitchen.”

“The Helix spiral freezer has enabled us to significantly expand production capacity by 30%. The use of automated equipment means that our production line is continuously moving without interruption and our product quality levels are improved with consistent, non-stop freezing.”

“As always, we have enjoyed working with Starfrost, from point of sale through to commissioning and install, the transparent and personable service that the teams have provided is refreshing and of the highest standard. We look forward to working with Starfrost on our next project.”

The spiral freezer designed for COOK operates uninterruptedly and freezes produce consistently, allowing production at COOK to be accurately controlled and monitored whilst delivering dependable quality results. The automated solution provided by both Starfrost spiral freezers has enabled COOK to increase total throughput by 80%.