Perfection principals to move to Pro-Pac

Perfection principals to move to Pro-Pac
Management to stay on, Perfection site to be kept while other manufacturing facilities to be closed

Pro-Pac Packaging says the principals of Perfection Packaging and Polypak will stay on with the company and integrate into its leadership and operations teams following the acquisition of the businesses.

Pro-Pac is also planning to keep on Perfection’s custom built factory, which it acquired as part of its purchase of the Melbourne based company along with Polypak in Auckland.

The packaging giant is buying 40 year old Perfection, which claims to be Australia’s largest independent flexo printer for $49.8m, with its acquisition being expected to be complete in September. The purchase of soft flexible Polypak in NZ will be completed later this month, costing Pro-Pac $8.2m.

The Perfection site, which was extended last year from 6,000sqm to around 10,000sqm will be added to Pro-Pac’s six other industrial and flexible manufacturing sites, while two of Pro-Pac’s other facilities will be closed. Details of what will happen to staff and Polypak’s facility and equipment are unclear. Pro-Pac closed three of its eight distribution centres, in Acacia Ridge, Laverton and Bervely in FY18, with plans to close another in the next financial year.

No changes have been made to its five rigid manufacturing and three rigid distribution facilities.

The company says it is following its strategy of growing in the flexibles market, which it says is worth around $2.2bn within the overall $22bn produced by Australian packaging. Pro-Pac says hard flexible packaging film makes up the majority of the flexibles market, at $1.3bn of the $2.2bn sector.

Pro-Pac says the acquisitions grants it entry to the larger hard flexibles segment, along with opening access to new markets and products complementing its existing business.

[Related: Pro-Pac buys Perfection in $58m spree]

The move follows the company’s $178m purchase of Integrated Packaging (IPG) in November last year. Pro-Pac total revenue for last financial year was $229m, this excludes IPG.

Perfection has purchased an additional flexographic press and high-speed slitter rewinder earlier this year, making for a total of five flexo presses, three solvent-less laminators and four rewinders in its equipment. The company employs around 100 staff and its current owners who acquired the business in the early 2000s, are now looking to align with a larger player to accelerate its growth, according to Pro-Pac.

Perfection’s production is forecasted to be around 80 million metres per annum of printed laminate hard flexible primary packaging, with the extra equipment purchased this year expected to make for a 52 per cent increase in capacity. In FY2017, it generated sales of $35.4m and EBITDA of $4.5m, up from $30.5m and $4.5m in FY2016 respectively.

Pro-Pac says Perfection also offers a range of flexo packaging solutions, including high definition prints, up to ten colours, various lamination offerings providing enhanced barrier properties, development and production of high speed structures for efficient production on packing lines. Around 95 per cent of its sales are said to come two types of products: rewind and bags.

NZ based Polypak has been operating since 1978, with its current owners acquiring the business in 1983. Pro-Pac says the owners were seeking a generational change.  

Polypak generated sales of $13.1m and EBITDA of $1.9m in FY17, increasing from revenue of $11.6m and EBITDA of $1m the year before.

Pro-Pac says Polypak has a strong niche position in specific categories of soft flexible packaging, including custom plastic bags and specialist sheets for lining cartons, and general use packaging specifically for primary food bulk production in red meat, fish and poultry.

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