Australia’s Pro-Pac continues rapid expansion

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Sydney-based Pro-Pac Packaging Ltd. has only a small share of Australia’s plastics packaging market, but has embarked on an aggressive purchasing spree to increase its reach across the industry.

Pro-Pac has bought four companies this year, including food-services packaging company Gallego Pty. Ltd., trading as Deandy Packaging, in April. Deandy, based in Cavan, Australia, a suburb of Adelaide, distributes plastic, foil and paper food-packaging products, including polypropylene cutlery and sandwich containers.

Other purchases, all in the Sydney area, include Australian Pharmaceutical Containers, which imports and distributes pharmaceutical glass containers and metal disclosures, in May; general industrial packaging-product distributor TWM Group of Cos. Pty. Ltd., trading as Preferred Packaging Systems, in April; and industrial packaging, safety and warehouse products distributor Hills Industrial Packaging Pty. Ltd. in January. Preferred Packaging’s plastic products include polyester strapping and polyethylene film, and Hills Industrial sells PVC tape and shrink wrap, and PET strapping.

Pro-Pac CEO Brandon Penn said the company wants to grow its rigid and flexible plastics divisions and expand what is currently only a “very small share” of the Australian plastics packaging market.

Penn is encouraged by Australian media reports speculating Pro-Pac will become a A$1 billion (US$1.03 billion) company within five years, however he said that is an “ambitious” target. Its share value has risen more than 75 percent since October 2011. Penn said the company is worth about A$140 million (US$144 million).

Penn said Pro-Pac’s acquisitions are part of the company’s short-term plan to grow annual sales to between A$250 million (US$257 million) and A$300 million (US$308 million). However, he said acquisitions are “opportunistic” and will only proceed if they add value.

Pro-Pac manufactures and distributes bottles and containers, pails and buckets, jerry cans, and glass jars and bottles. It uses high and low density PE, PVC and PET. It also manufactures industrial packaging products such as biodegradable and polystyrene void fill, and sells general warehouse machinery.

The company, which has been traded on the Australian Stock Exchange since 2005, employs more than 270. It has operations in Sydney, Adelaide, Brisbane, Perth and Melbourne.

Penn said Pro-Pac has “a very wide reach” and is growing in all markets, particularly the food, processing and industrial packaging industries. Since July 1, 2011, Pro-Pac has acquired eight companies that import and distribute packaging, protection equipment and/or safety products.

Bennamon Pty. Ltd., a related company of Melbourne-based Pact Group Pty. Ltd., holds a 48.27 percent share in Pro-Pac. Pact manufactures plastic products, like PET bottles and containers, for the food and retail industries, and larger containers for industrial applications, including plastic pails, cubes, drums and jerry cans.