Melbourne, Australia — Rigid plastics packaging giant Pact Group Holdings Ltd. has overcome a potential regulatory hurdle to buy a key competitor, Sydney-based Power Plastics Pty. Ltd.
Because both companies manufacture and supply PET, polyethylene and polypropylene packaging in the state of New South Wales (NSW), Australian law required Melbourne-based Pact to seek permission from the Federal Government watchdog, the Canberra-based Australian Competition and Consumer Commission (ACCC).
ACCC's two-month review said the purchase is “likely to lessen competition,” but ACCC Chairman Rod Sims said it could still go ahead.
ACCC's report, made public Feb. 18, said Pact will continue to face “some competitive constraint” from other manufacturers in NSW and, to some extent, from Victoria and Queensland.
“Other manufacturers of similar products are not as large as Pact or Power Plastics, but some could possibly expand to meet customer requirements,” Sims said.
“Some customers may have the ability to sponsor expansion by smaller manufacturers, or alternatively to [start] manufacturing products in-house.”
ACCC said Pact is the second-largest supplier of PET containers in NSW, and Power Plastics is the third largest. The largest is likely Melbourne-based Visy Industries Pty. Ltd., privately owned by the Pratt family.
Pact, which is publicly listed, is Australasia's largest rigid plastics packaging manufacturer and operates 70 plants in seven countries.
Power Plastics is based in the Sydney suburb of King Park, where it owns a 127,000-square-foot site. It is privately owned.