Fillers talk to SPRAY about the latest in business and technology Expansions, mergers and a lot more… Ava Caridad, Editorial Director Ladue March 2016 Spray 15 In the past few years, the contract filler industry has seen its fair share of mergers and acquisitions. There’s often a great deal of concern whenever fillers merge. Some worry about stock prices, while employees are anxious about potential job cuts. Fillers’ customers often worry about fewer filling options and higher prices; less competition means more of an opportunity for price hikes. Conversely, if a merger results in reduced operating expenses, the new business may increase gross profits by lowering prices. Global filler Colep, who became the sole shareholder of Brazilian companies Provider, Total Pack and Colep Provider Aerosol (CPA) in 2015, explained in a company release that its international strategy involves reinforcing its business presence in different regions of the globe, particularly the Americas. Colep first entered the Latin American personal care and household care product markets in 2010 by acquiring a 51% stake in the three Brazilian manufacturers; it then purchased the remaining 49% previously held by ZM Participação and is now wholly responsible for managing the companies’operations. Barony Universal, based in Ayrshire, Scotland and Sanmex International in Glasgow, Scotland, active competitors for many years, combined in November to create the largest independent aerosol manufacturer in the UK. Between them, Barony and Sanmex fill over 100 million units a year, primarily anti-perspirants, body and hairsprays, as well as household cleaners. The joint operation will employ approximately 230 people across the two sites, with a combined turnover of £40 million ($57.5 million). The combined expertise and track record of the two firms will deliver a significant competitive advantage, allowing the new company to pursue much larger contracts, both in the UK and in the global marketplace, the companies said in a statement. The combined operation will have deep penetration into a number of the sector’s most competitive areas including personal care, home care, auto care and pet care. Manufacturing will continue at both locations and both companies will continue to trade under their own names for the foreseeable future. In filler acquisition news, billionaire brothers Anthony and J.B. Pritzker, partial heirs to the Hyatt Hotels fortune and cofounders of private investment firm Pritzker Group, purchased PLZ Aeroscience from private equity firm Olympus Partners. Terms of the deal were not disclosed. In June, KIK Custom Products announced a definitive agreement under which affiliates of Centerbridge Partners, L.P., a private investment firm, would acquire KIK from CI Capital Partners. Breaking ground, building out… Reports in the past 12 months of filler expansion have been numerous. These include PLZ Aeroscience, who in December opened a 160,000 sq. ft. global distribution center adjacent to the company’s Pacific, MO manufacturing facility, which serves as a centralized product fulfillment center for PLZ customers worldwide. “This significant capital investment provides PLZ an opportunity to consolidate its North America warehouse footprint, bring distribution closer to manufacturing and add jobs in the community,” said Geoff Ladue, SVP, COO. “The custom-built distribution center is capable of expanding its footprint to 280,000 sq. ft., thereby offering significant room for future growth. The efficiencies PLZ gains by locating a stateof the-art global distribution center adjacent to one of its larger U.S. manufacturing facilities are immeasurable. We’re now equipped with an expandable warehouse and distribution facility that will reduce lead times and enable quicker response to filling customer orders.” PLZ has signed a long-term lease on the facility and has added approximately $450,000 in new equipment. When in full operation, the distribution center will employ approximately 20 people; the adjacent manufacturing plant operates three shifts, five days per week and employs approximately 240 full-time people. PLZ Aeroscience continues to invest in capital improvements to expand its service offerings, automate filling lines and improve line speed. The improvements are designed to provide PLZ the flexibility and capacity needed to grow the business and exceed customer expectations, according to Ladue. Notable investments include new cut & stack and high-speed roll-fed label printing equipment that supports on-time order delivery targets on brand and private label products available through the PLZ Distribution Division. The print-on-demand equipment enables customers to change label art easily and efficiently while eliminating label obsolescence and the need for costly printing plates. This equipment will be fully operational for in-line labeling by April 2016. “Automatic palletizers will also be installed in 2016 as we continue to invest in end-of-line automation,” continued Ladue. “It is important to mention that PLZ Aeroscience invested in implementing state-of-the-art Statistical Process Control (SPC) software to quantify and measure its manufacturing processes. We are currently tracking over 800,000 data points in order to maximize product quality and production efficiencies. With the data we’re able to evaluate from this technology enhancement, we have charted a clear path to achieving sixsigma designation,” Ladue explained. “Additionally, our Assured Packaging facility recently passed an extensive Safe Quality Food (SQF) audit. We now have the capability and SQF certification to batch and fill pan spray in both our Plaze and Assured Packaging facilities.” In the fall of 2015, PLZ Aeroscience reached production of two billion cans.
Spray March 2016
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