The country's biggest print operation, IVE, is committed to entering the packaging market, and is zeroing in on the higher margin, shorter run, folding cartons segment, and the flexibles packaging segment.
It says due to the similarities with many of the Group’s existing business, and its aligned ESG credentials, the $700m fibre-based folding cartons market is its initial and primary area of focus.
Its analysis indicates that the folding carton market, which makes up a large percentage of the preferred food packaging for large food and beverage customers, is growing, and will provide sustainable returns and solid growth prospects for mid-tier players.
IVE says it will be in the current year that it will identify and execute an “appropriate packaging acquisition”. Geoff Selig, executive chairman of IVE said, “The Group is well placed to execute on a range of strategic initiatives over the year.”
IVE currently generates around $10m of revenue in folding carton work. It says it is not looking to compete against the big three folding carton companies, who operate in the long run, high volume space, but is seeking to position itself in the mid to small tier space, where it says it can “play a consolidating role”.
It is now looking for a “modest beachhead” acquisition, but says it will remain “prudent and disciplined” regarding asset selection and purchase price. It has established a new $40m acquisition facility for the year, with Selig saying the first cab off the rank will be a packaging business.
During last year the company worked closely with an expert advisory firm to complete an in-depth analysis of the Australian packaging market, with a view to further developing and refining plans for a more aggressive move into the packaging sector.
IVE has just released its financial results for the year, with all figures rising strongly; revenue is up by 27.5 per cent to $967m, EBITDA up by 23 per cent to $119m.
