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September 16, 2024

ProAmpac ready for more growth with acquisitions, sustainability

By Jim Johnson
Plastics News Staff

Chicago — ProAmpac has made a big splash in the flexible packaging business in recent years, using an acquisition strategy to help fuel growth.

As one of the largest flexible packaging converters in the United States, the company has significant stakes in both the plastic and paper sides of the business. And, CEO Greg Tucker said, there is an appetite to grow even more — quickly.

As the ProAmpac business has expanded over time, so has the importance of sustainability in the company's approach.

"What this is centered around a lot, obviously, is sustainability," said Kristy Paulin, executive vice present of global marketing for the company. "We're not referring to this as a trend anymore. It's not a trend; it's the driver. It's the biggest influence that we're seeing in terms of our product innovation and as a manufacturer. So it really is the biggest influence."

Plastics News photo by Jim Johnson

ProAmpac Chief Operating Officer Sachin Desai, left, and CEO Greg Tucker.

ProAmpac does about half of its business in plastics, the other half in paper, calling itself substrate agnostic. Whatever is best for the customer and product is what ProAmpac will use.

It ranks No. 10 among North American film and sheet makers according to Plastics News data.

"We really think of ourselves as a company built on innovation. It's not just our products, but that's through our culture and our processes and how we treat people and really how we go to market," Paulin said at the recent Pack Expo in Chicago.

Creating ProAmpac

Tucker, the founder of ProAmpac, started in the flexible packaging business with an acquisition in 2012 and armed with what he said was a thesis about how a flexible packaging business should operate. Tack on additional acquisitions over the next few years and the company eventually grew into what is now known as ProAmpac through the 2015 merger of Prolamina Corp. and Ampac Holdings LLC.

Tucker, who previously built a real estate company and an aerospace defense company, was attracted to flexible packaging because of the amount of material needed compared with rigid packaging.

"The thesis around it was flexible packaging first. It's reducing. It's less shipping space, so it takes up one-tenth the amount of truck space. It's less material. So in and of itself, flexible packaging is a sustainable solution," he explained.

Tucker said he has seen his company's annual sales substantially increase in just a few years, from the approximately $2.5 billion posted in 2024 to $3 billion expected in 2025. But why is he so bullish on the future?

"I think this company in the next probably three years will double in size to $5 billion in revenue," he said.

The "why" is because people are now expecting sustainability to be part of the packaging equation and not just something to talk about. "It's something that's happening," he said, and that expectation is driving demand.

Tucker said he sees this future increase happening through "some acquisitions and organic growth" while also continuing to be substrate agnostic when developing packaging for clients.

Ways to grow

Sachin Desai, chief operating officer at ProAmpac, sees growth opportunities throughout the company's operational footprint.

"If you think about ProAmpac and how we're oriented in the marketplace, we're vertically integrated in each one of the major substrates and packaging platforms that we have throughout the market," he said.

"Then if you think about the regions that we're in — U.S., Canada and then Europe, broadly speaking — we have opportunities to continue vertically integrating in each one of those geographies that we're in and then continue expanding in each one of those geographies," he said.

"[In] Canada, we had a great acquisition with Gelpac. ... There's still a lot more that we could be doing around vertical integration up in Canada, which is going to be a focus for us in 2025, '26 and '27," Desai said.

Gelpac makes polyethylene woven and multi-walled paper packaging.

"We think the Canadian market can easily double in size in that time frame. Europe is in the same thing. So, we went on our acquisition spree in 2021, and we've done a hell of a job integrating since that point," he said.

Desai views Europe similarly with opportunities to expand through vertical integration as well as geographic expansion.

"When we come back to the U.S., which is where the business was founded, and you just look at our footprint, we are underserved on the West Coast, and we are underserved in the Southwest of the U.S. And those are great opportunities for us to expand as well," he said.

But what exactly is vertical integration in Desai's view?

"Having film capabilities, converting capabilities, pouching lines is one major pillar. And then the other area is on the fiber side — continuing to expand in mills that we have, converting equipment on the fiber side, coatings technologies and sealant films. And on the paper side, coatings technology is going to be a core area for us," he said.

Opportunities in sustainability

ProAmpac's business pipeline for sustainability-based products was a small fraction of revenue just four years ago, but now the number is about $650 million, Tucker said.

"I think in the next three years, all of our pipelines will have some sustainable attribute. We can offer 100 percent of our products with a sustainable attribute," the CEO said.

This dramatic increase in sustainability-related business did not just happen on its own. The company has made investments in both technology and people to create additional opportunities.

"The purpose of our company: We're a material science company, and we're going to deploy that technology," Tucker said. "We're big in the U.S., and we're big in Canada, and we're big Europe now.

"Flexible packaging is at an inflection point. It's going to really move significantly into proactive sustainable solutions," he said.

The move to mainstream sustainability certainly is being driven by customers and their changing preferences, said Ian Moore, corporate sustainability specialist with ProAmpac. "But a large force behind it is regulations that are cropping up across jurisdictions," he said. "And they are all in a little bit of a different place. ... But the direction we are going in all of this is boiling down to a few key points."

Those drivers include greenhouse gas emission reductions, extended producer responsibility laws, recycling and composability targets, and packaging taxes, Moore said.

ProAmpac's largest shareholder is Pritzker Private Capital, an investment firm controlled by the family that founded the Hyatt hotel chain. Management owns about 25 percent of the company, and Pritzker has a slightly larger stake. Because of this structure, Tucker said, other family-owned companies see value in joining ProAmpac because members have an opportunity to stay and keep working at the larger firm.