SCHMALBACH-LUBECA NOT SATED BY JCI BUY

Comments Email Print

ATLANTA — Schmalbach-Lubeca just completed its first major move toward globalization with the purchase of the Plastic Containers Division of Johnson Controls Inc., but it's not enough for Schmalbach Chairman and Chief Executive Officer Hanno Fiedler.

He wants to be No. 1 or No. 2 worldwide in each of the company's market segments. To meet those goals, he plans to grow the company in PET containers, restructure, and enter new markets outside food and beverage containers.

Globalization, Fiedler said, is a necessity for continued growth.

The top five areas for opportunity and market growth in 2020 will be China, the Americas, Japan, Indonesia and India, he said at Packaging Strategies '97, held April 2-4 in Atlanta.

The Ratingen, Germany, firm closed on the Manchester, Mich.-based JCI unit deal earlier this year. Schmalbach mainly had been a regional player in Europe in the metal and plastics packaging and closures businesses.

Last year, of Schmalbach's $2.64 billion in sales, 92 percent were from Europe, while 7 percent were from North America. Schmalbach divested its metal and non-PET plastics packaging units last year.

The firm expects that 68 percent of its sales will continue to come from Europe this year, but 29 percent will come from North America. As for globalization, six years ago Schmalbach was present in seven countries with 42 plants. This year, it will have 72 facilities in 20 countries.

As a result of the acquisition and divestitures, Schmalbach's product portfolio now features beverage cans, White Cap closures and PET containers.

The firm's PET containers division is the worldwide market-share leader, is No. 1 in Europe and No. 2 in the United States, and has plants in 16 countries.

Fiedler expects double-digit growth in each of PET's regions and a higher portion of sales than the beverage cans segment.

``We can't stop where we are,'' Fiedler said. ``We have to keep PET growing — more plants, more countries and more opportunities. There's room to grow in PET and be competitive.''

He also plans to regain market share supplying PET bottles to Coca-Cola Co. and Pepsico Inc.

``We will be a better supplier to them and a good supplier follows customers into new markets.''

The beverage can segment is No. 2 in Europe. Asked if that unit will expand in North and South America, Fiedler replied that the company is interested in every business opportunity and will not rule out strategic expansions.

The other business segment, White Cap closures, has limited market growth for vacuum closures, Fiedler said. However, White Cap has new applications in conventional plastic and tamper-evident closures and will follow customers.