Berry buys controlling interest in Chinese packaging firm

By Jim Johnson
Senior Staff Reporter

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: January 22, 2014 6:00 pm ET
Updated: January 24, 2014 1:25 pm ET

Related to this story

Topics Packaging, Mergers & Acquisitions, Injection Molding, Thermoforming, China

EVANSVILLE, IND. (Updated) — For Berry Plastics Group Inc., an investment in Qingdao P&B Co. opens up a door to China for a company that has aspirations to be a bigger player in emerging markets.

And for P&B, a partnership with Berry Plastics brings expertise and research and development resources.

Berry Plastics, of Evansville, Ind., is planting a flag on Chinese soil for the first time by acquiring a 75-percent controlling interest in P&B, a packaging company that is being renamed Qingdao Berry Plastics Ltd.

P&B, with annual sales of $34 million, is partly owned by Chinese liquor giant Wuliangye Group, one of China's largest and best known makers of baijiu liquor. Peter Song, who founded P&B, will retain a minority interest in the company and continue to serve as general manager.

"Their expertise and R&D resources are what we need to give more value to our customers in China," Song said about Berry Plastics. "Our customers in China move very fast and they want access to a supplier like Berry."

Berry Plastics sees P&B as a springboard.

"There is much growth potential in the Asian markets. P&B is an established and well-respected packaging business in China. P&B shares Berry Plastics' same focus on safety and quality and is also dedicated to bringing innovative products to markets," said Eva Schmitz, a spokeswoman for Berry.

P&B uses thermoforming, injection molding and automated assembly manufacturing processes to make packaging for multiple markets, predominately food and personal care, in both China and globally, Berry said.

Products include facial tissue packaging, packaging and applicators for feminine hygiene products and food storage containers, Schmitz said.

P&B, which formed in 2005, has operations and headquarters in the Qingdao free-trade zone. The company is itself a joint venture owned by a mold making unit of Wuliangye based in Yibin, Sichuan province, and a company owned by Song. Wuliangye subsidiary Sichuan Yibin Push Group Co. Ltd., which makes thin wall molds, has a 51 percent stake in P&B, Song said in a Jan. 23 interview with Plastics News.

"Berry's international expansion initiatives will allow the company to serve our customers' needs on a global basis. Secondly, it would allow the company to establish relationships with new customers that may be specific to that particular region. And then, third, it would allow the company to establish a presence in geographic regions where there has been historical economic growth and there are predictions for continued economic growth, such as the case for China," Schmitz said.

Song said P&B has been a supplier to Berry for more than seven years, and said the joint venture is a natural evolution of that relationship.

He said Qingdao will be Berry's first factory in China. Berry's website indicates it has a handful of other facilities in Malaysia, India and Australia. But most of its manufacturing is in North America.

"I also feel that Berry has a big plan to grow in China," Song said.

Berry Plastics CEO Jon Rich, in a statement, talked about capitalizing on "combined business strengths to bring an increased number of innovative products to the Chinese and Asian markets."

For P&B, joining with Berry, a $4.6 billion company, offers significant research and development skills that can be applied in China, Song said.

P&B has 550 employees in its Qingdao factories, along with 30 injection molding machines, mostly Husky and Sumitomo models, along with five thermoforming machines and two extruders from U.S. and German companies, Song said.

He said he partnered with Wuliangye after buying Husky molding machines to enter the thin-wall packaging market and wanting to upgrade the quality of his molds.

"Originally we tried to buy the molds from Wuliangye but they proposed to form a joint venture with us," he said.

Terms of the deal, expected to close by February, were not disclosed.


Comments

Berry buys controlling interest in Chinese packaging firm

By Jim Johnson
Senior Staff Reporter

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: January 22, 2014 6:00 pm ET
Updated: January 24, 2014 1:25 pm ET

Post Your Comments


Back to story


More stories

Image

Bayer spinning off plastics business

September 18, 2014 8:49 am ET

Bayer AG will spin off its MaterialScience plastics group into a separate, publicly-traded company within the next 12 to 18 months.    More

Image

Smartphone work adds 52 percent to sales for China's Eva Precision

September 18, 2014 4:37 pm ET

Growth in supplying the smartphone and automotive industries helped Chinese processor Eva Precision Holdings Ltd. push injection molding sales up 52...    More

Image

Bill Kent named Thermoformer of the Year

September 18, 2014 12:11 pm ET

Bill Kent flew 6 million miles in a 50-year career at Brown Machine LLC — where he began assembling thermoforming machinery on the factory...    More

Image

Nolato Contour beefs up white room molding capabilities

September 18, 2014 11:56 am ET

Nolato Medical has extended its controlled environment options to include a white room at its Baldwin, Wis., Nolato Contour plant.    More

Image

Thermoforming conference draws 300 first-time attendees

September 18, 2014 10:39 am ET

The Society of Plastics Engineers Thermoforming Conference drew 814 attendees, according to Jim Arnet, conference chairman.    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events