DS Smith further consolidates its position in liquid packaging

Related tags Marketing

DS Smith has further consolidated its position within the liquid
bag-in-box packaging sector with the recent purchase of German
company Zewathener. FoodProductionDaily.com spoke to the companies
marketing manager, Stephen Morris, to find out more about the
current state of the sector.

Consolidation within the European liquid packaging sector has changed the face of this industry sector beyond recognition in recent years.

During this time British Group DS Smith's plastics division has built on its position to become one of the leading European - and now global - players, in the liquid packaging sector. Through its subsidiary, Rapak, it now has worldwide prominence in the supply of both liquid box packaging and dispense systems.

Recently Rapak further strengthened its market position with the acquisition of Zewathener, which is based near Mannheim, Germany. Zewathener has built up its own reputation as one of the most innovative players in the European liquid box packaging sector. FoodProductionDaily.com spoke to DS Smith marketing manager Stephen Morris to find out what the acquisition means to the company and to throw more light on the current state of the sector.

"The acquisition of Zewathener is a fantastic fit to our existing liquids packaging portfolio,"​ said Morris. "It now makes us the biggest bag-in-box liquid packaging producer in both the UK and Europe and brings a number of value-added benefits to our company.

"This is a relatively mature sector, having undergone a great deal of consolidation in recent years. Rather than a growing market it is a polarised market, with more and more consolidation squeezing out the smaller players."

The acquisition of Zewathener is the third in a series of buy-outs by Rapak that has gradually strengthened its position as a global player. It follows the recently announced joint venture with Australian-based AEP Industries, acquiring a 50 per cent stake in AEP's bag-in-box liquid packaging operations which created Rapak Asia Pacific. The other move was Rapak's earlier acquisition of Rapak LLC and Formative Engineering (now Worldwide Dispensers) in the USA. This division specialises in the manufacture and production of bag-in-box packaging and filling systems and precision injection moulded parts for applications such as liquid connectors.Together Rapak's global liquid dispensing and packaging businesses now have combined annual sales in excess of €165 million.

"The addition of Zewathener has strengthened our position in the European market. Together with the other two acquisitions, this purchase has been part of a purposeful strategy aimed at giving us increased leverage.

"Zewathener has design patents and products that we have wanted to get our hands on for a long time. In particular the company has advanced valve and closure technologies that we can now include in our global activities. On top of that we now have a second manufacturing facility in Germany, to supplement an existing nearby facility in nearby Düren.

"For our packaging operations it is vital that we stay ahead of all the latest innovations, which today often means a particular focus on the valves and closures side of the business. We have a host of very big and highly demanding customers, such as the Pepsi Cola Company. Obviously, working in such a competitive market, such customers have to be very discerning and in turn they demand that their packaging remains one step ahead of the latest packaging innovations."

Is the market for liquid packaging and filling systems now fully matured? Is there room for Rapak to expand further and does that mean there will be yet more consolidation?

"DS Smith is certainly an acquisitive Group and it is safe to say that plans are ongoing for further acquisitions. However, this particular segment is now highly organised and in terms of consolidation in the European market, there really doesn't appear to be that much room for further movement. On the other hand, the company had said that there would be no further acquisition in this sector before we bought Zewathener, so there is always the possibility of further movement."

Related topics Food Safety & Quality

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