CMT participated in the 2nd annual AMI Thin Wall Packaging Conference this week in Wheeling, IL. This was the first time that we attended this seminar and based on what we heard and who we met, it is likely that we will return next year.
AMI is a global market research firm and they brought together some major players from the world of plastics packaging. For companies like CMT that operate in the B2B space working with toolmakers and thermoformers, it is always valuable to expand the frame of reference beyond the engineering challenges of our daily work. Not only did we hear from upstream resin suppliers such as Milliken Chemical (who debuted an interesting new app), major brands such as General Mills, Danone and Kraft Foods provided insight into the importance of customer acceptance of new package design. We had the opportunity to talk about the critical role that our syntactic foam plug-assist materials play in overall package design and finished part quality. Thermoformers, toolmakers, sheet suppliers and major converters as well as some injection molding suppliers were all present at the table-top exhibition. Barrier film technology, in-mold labeling and retort packaging were just a few of the topics presented.
Down-gauging and light-weighting were two key topics and ones that are central to our value proposition. The ability to reduce the starting thickness of thermoforming sheet (source reduction) while maintaining the integrity of package and the contents within provide clearly documented financial and environmental benefits. In addition, lower weight parts also contribute to improved end-of-life processes (waste reduction).
We frequently talk to our partners about the interplay of plug material, plug design, material selection and sheet temperature. During the AMI show, we were glad to hear about some new projects where people were talking not only about down-gauging, but also reducing sheet temperature. The topic of sheet temperature vs. oven temperature can be addressed in its own blog, but we were very pleased to hear that some people recognize the importance of running at the sheet’s optimal temperature.
In addition to technical presentations, we also heard interesting talks on market trends, including some statistics on M+A activity in the packaging space. There were 112 deals in the past 6 years, 60% of which were thermoforming-related. Of those deals, approximately 60% were done by strategic buyers and 40% were done by financial buyers. The speaker, John Hart from PMCF, sketched out 3 categories of deal types (low, mid, high) and provided EBIDTA multiple ranges for each: 5-6x for low; 6-7x for mid; 7-8.5x for high.
AMI are hosting the 8th annual European Thin Wall Event in Cologne this December and we are planning to attend.