Chicago — Anybody needing proof that the plastics industry is a global market can simply look at merger and acquisition market trends during the past 15 years.
Last year wasn't a record year for plastics-related deals, but it was pretty darn close.
Tom Blaige, CEO of Blaige & Co., a Chicago-based financial firm that deals in plastics, packaging and chemicals transactions, indicated at the recent Plastics Caps & Closures 2016 conference there were 523 plastics-related deals last year, down just slightly from 536 in 2014 and 540 in 2010.
Those numbers were up from about the 200 or so posted in both 2001 and 2002.
“Most of that growth has come from international activity, really activity not involving anything to do with the U.S., a lot of cross-border international activity,” he said.
And not only has overall deal-making increased dramatically, but deals in the packaging sector of the industry are up substantially as well from 71 in 2001 and 50 in 2002 to 164 last year, Blaige said at the conference organized by Plastics News.
Deals in other segments of the plastics industry, in both industrial and raw materials, also are up substantially over time.
Global consolidation brings what Blaige calls a “squeeze” on plastic packaging manufacturers and converters from the upstream of raw material prices and the downstream of their customers.
But globalization also brings opportunities for packaging companies as consumer product goods firms look to consolidate their suppliers.
“When you think about a company like Coca-Cola or another large CPG company, when they want to go, they want to go fast. They don't have the resources to help 90,000 suppliers in 15 companies to figure it out. So if you are able to consolidate and bring the same experience to customers globally, I think you have a chance of putting something together that's pretty special,” said Rick Ritter, general manager of Jabil Packaging Solutions, formerly called Nypro Packaging.