Nations across the globe, including those in Asia and the Middle East, are continuing to develop, and that is good news for packaging manufacturers such as Graphic Packaging Holding Co. (NYSE: GPK) of Atlanta. Grocery stores and other consumer goods retailers are expanding their international presence as spending rises in these markets. The result is a big need for things like packaged foods.
Graphic Packaging has made it clear that it will continue to look for growth opportunities in the U.S. and abroad. The company, which makes containers and boxes for the food-and-beverage and consumer sectors, has been making acquisitions.
In 2016, Graphic Packaging agreed to buy Walter G. Anderson Inc. for an undisclosed amount. WG Anderson manufactures folding cartons for branded foods and consumer products. The target has facilities in Iowa and Minnesota. “The acquisition of WG Anderson is a continuation of our strategy to grow in attractive geographies and end markets,” says Michael Doss, Graphic Packaging CEO.
In addition to the U.S., Graphic Packaging has also been looking for deals in international markets. In 2016, the company completed its purchase of Mexico’s G-Box SA de CV, another folding carton manufacturer, and also offered to acquire Australia’s Colorpak. In 2015, the company acquired paper packaging maker Carded Graphics.
Global demand for containerboards, paper packages, and other distribution products is expected to increase in the next few years. According to packaging-focused marketing and consulting firm Smithers Pira, the sector is expected to be worth around $184 billion by 2018. A lot of that growth is driven by a combination of demand for mobile devices, retailers cutting costs, and the need for personal care products. For instance, Colorpak provides packaging products for the health care, food and beverage and technology sectors.
Graphic Packaging is not the only strategic buyer that has been making acquisitions in the space. In 2015, Quad/Graphics Inc. (NYSE: QUAD) acquired folding carton maker Copac Global from Carousel Capital Partners and WestRock Co. (NYSE: WRK) purchased recycled containerboard maker SP Fiber Holdings.