Market Gossip From Interpack – Pulse, Amcor, BPI & More

Posted on 22 May 2017

Market Gossip From Interpack – Pulse, Amcor, BPI & More

Interpack Dusseldorf

One of the largest packaging shows on Earth.  18 halls, hundreds of exhibitors and tens of thousands of visitors.  As ever we sent our people along to check out “What’s New”. This time it was George Slack, our Managing Director & Dave Daniels our Technical Director who spent 2 whole days looking at the developments in print & film technology.  They returned exhausted but with lots of new ideas and new information on materials and even more information on what’s happening in our industry across the globe.

Some of the points noted were:-

• As mentioned in our previous notes, the polymer shortage crisis appears to be over and there is now normal availability for all grades of commodity films.
• As a consequence a softening in polymer prices is anticipated for June/July deliveries.
• There are 4 more new OPP film manufacturing lines going into production later this year or early next year in Europe.
• In addition 2 new lines are planned for India over the same period. All the companies we met considered the UK was part of their target market for supply.
• The recent extended delivery times in the first ¼ of 2017 saw some UK imports from companies in both China and Russia, neither of which had BRC accreditation!
• Much of the new capacity will be focused on “special films” including coatings, if the suppliers are successful the number of coated film manufacturers will increase to 8.
• The demise of Pulse (of which more later) left at least 2 film manufacturers with significant financial losses. As a consequence film manufacturers are finding obtaining credit insurance on some smaller UK convertors has become much more difficult.
• Not all the new lines (plated capacity circa 200,000 tonne) will be additional supply as some older lines will be scrapped.
• Bio films were popular with 6 different exhibitors showing products. These were mainly starch based PE alternatives. On close examination none of these yet looks commercially viable for bulk mainstream supply.
• Flexible Pouches of every conceivable shape & size were prominent from sources across the Far East, The Middle East, China, India and Europe. This market is inundated with innovation, including retort, re close, spouts and zips.  Again the UK is seen as a prime target market for several of these companies.

In summary there was much to see and hear, whilst most of the products were known, there were some films and pouches worthy of further investigation.  Anyone wanting more details should contact Dave Daniels on 07785 293231.

Pulse, Amcor, BPI & More

We were genuinely sorry to hear that the administrators had been called in at Pulse Packaging. The company has been around a long time and regrettably many good people have now lost their jobs.  I suspect many of these people will be lost to the industry forever.  It’s an unfortunate fact of Commercial life that these things happened and often those who created the circumstances for a financial crash are no longer there when it happens.

But there is another dimension to this failure.  Pulse had a customer base which included some of the largest Brand Owners in the food industry.  These companies use their buying power (quite rightly it could be argued) to control suppliers prices and margins, in some cases below levels which are sustainable. The consequence across the industry is, right now, that not only Pulse have a major problem, but also Amcor at Whitehaven and BPI Protec have also recently announced redundancies along with Coveris.  This does not imply these companies have major financial problems, but it does suggest that perhaps some big major brands are storing up longer term problems unless they accept legitimate price increases.

Pulse was probably a unique set of circumstances with a large pension deficit alongside a large capital expenditure programme.  But Amcor, BPI and Coveris are not the type of companies who make redundancies without good reason.  There is little doubt that there is a major price and margin squeeze which is originating from the Supermarkets.  This is creating financial pressures throughout the food and food packaging sector.  Where it will end is anybody’s guess but I fear it may get worse before it gets better.

P.S. Thanks to those who contacted me on LinkedIn regarding my last missive, highlighting the growth of QA bureaucracy, your comments were very welcome, particularly as no-one disagreed.

I am now away for my spring break!  But as ever should you have any views on any of the items raised, these will be welcome.

Many Thanks,

Barry Twigg