A spokesperson for PCI Films, which compiled a report on the sector’s acquisition records, told FoodProductionDaily.com that since Amcor’s takeover of Alcan in 2010, there has been much more market consolidation – particularly from private equity groups.
Amcor has been seen as a dominant figure in the flexible packaging market since the acquisition, and now holds around 25% of the European market, which according to PCI Films has prompted a series of mergers and takeovers.
The European flexible packaging sector, which is worth around €11bn per year, has witnessed many companies attempting to ‘bulk-up’ in an effort to compete and to be seen as a credible supplier.
Bulking up trend
This trend of consolidation and ‘bulking up’ is expected to continue in the European market as “there aren’t many companies that have the capabilities to service a high volume confectionery account, for example, that Amcor can and Alcan previously could,” said a PCI Films spokesperson.
“Amcor’s acquisition of Alcan’s European flexible packaging operations is the largest of a number of acquisitions over the past decade which has seen the company emerge as Europe’s largest converter with around 25% of the market.”
Private equity group Sun European Partners have led this ‘bulking up’ trend; with the acquisition of Kobusch Sengewald from US packaging group Pregis.
Sun European Partners added the company to its already substantial portfolio which includes UK-based Britton Group, Reuther Verpackung, Veriplast Flexible Solutions and Unterland Flexible Packaging.
The spokesperson added: “Further industry consolidation has also involved the increased involvement of private equity groups such as Sun European Partners, who have acquired a number of flexible packaging businesses under the Britton banner.”
Smaller companies benefit
Constantia, Europe’s second largest flexible packaging group, has followed this trend through the acquisition of flexible packaging converter Asas – signalling its move in to the emerging Turkish market.
Amcor’s market dominance has however, provided some benefit to smaller companies within the sector.
“Amcor have been cutting unprofitable accounts, which smaller converters have been able to pick up.”
“These smaller converters have a generally lower cost base and are more able to make a better margin on these orders than Amcor could in Europe and the UK,” added the spokesperson.