MASTER PLASTICS – a niche market producer of flexible packaging and knitted synthetic fabrics for the food, retail and agricultural sectors – has acquired Pouch Dynamics as a fourth arm to its operations, adding resealable bags and pouches to the Group’s product offerings.
Other existing operations are Barrier Film Converters (extruded films for lamination, multilayer and high-barrier applications); Peninsula Packaging (decorated and undecorated bags); and Plusnet- Geotex (nets for farming and commercial market applications).
‘The pouch technology was complementary to our existing businesses. After examining the various aspects and identifying the opportunity it presented to expand the product offering to the Group’s customer base, it made financial sense to buy an existing business rather than invest in our own infrastructure,’ explains Master Plastics CEO, Manley Diedloff.
The opportunity arose when Constantia Afripack Consumer Flexibles decided to divest and invited industry players to participate in a process to acquire Pouch Dynamics – a specialist manufacturer of pre-made bags and pouches deemed to fall outside Constantia Afripack’s core flexible packaging and cement bag business.
Constantia Afripack Consumer Flexibles is one of Master Plastics’ existing customers of lamination films and the two companies have enjoyed a long-standing relationship.
‘The acquisition of Pouch Dynamics meets our strategic objectives of expanding our value offering and growing our footprint in our chosen markets,’ Manley remarks. ‘The business will also introduce Master Plastics to a new customer base and we look forward to exploring the opportunities that will emerge as we entrench ourselves in this market.’
We always adopt a positive approach to problem solving by electing to see the opportunity that these challenges present the Master Plastics Group. This approach has been a significant driver of our success to date.”
Pouch Dynamics, he adds, will continue functioning as a standalone operation from its British Retail Consortium-accredited facility in Capricorn Business Park (Muizenberg, Cape Town). To ensure the future success of the business, Master Plastics has retained key skills and is in the process of restructuring Pouch Dynamics from a centralised to a decentralised model, which it believes is more appropriate for the business model. ‘This process includes revisiting everyone’s roles and responsibilities and introducing accountability at an operational level,’ Manley explains. ‘Additionally, it helps to end any state of uncertainty as quickly as possible as change of any nature is always difficult for employees to deal with,’ he adds.
‘We believe in empowering the team to perform its functions by providing everyone with the necessary tools to succeed and grow. For example, a financial reporting and IT platform enables factually based, data-driven management decisions, as well as measurements to establish whether interventions have been successful or not are viewed as key tools.
Mapping acquisitions strategically
Pouch Dynamics is Master Plastics’ second acquisition following that of Mapflex last October. Mapflex supplies growers, packers and retailers with modified atmosphere packaging (MAP) and PerfoTec technology (under an exclusive licence to PerfoTec in The Netherlands) to extend the shelf life of fruits and vegetables.
‘We’ve always followed a customer-centric investment strategy and this acquisition supported the Group’s customers who were requesting more MAP options,’ Manley explains. ‘In addition to enabling customers to source all their flexible fresh producerelated packaging needs from a single supplier, the acquisition has grown our footprint in the food market.’
Since Mapflex consisted of only a few assets and its entire supply chain was effectively outsourced, Master Plastics has relocated the assets from Capricorn Business Park to Peninsula Packaging’s facility in Bellville. This amalgamation and retention of key technical and sales skills will enable the production model to be changed from outsourced to in-house in certain areas – greatly improving service, efficiency and profitability levels.
Asked what’s next on the horizon, Manley winks mischievously and quips that an aligned opportunity within the agricultural sector, to further expand PlusNet-Geotex’s reach, would be fantastic as the Group has now invested significantly into the flexible operations. ‘Finance guys are renowned for boxing things into tightly defined parameters, so I’m enjoying balancing things by allowing our strategy to evolve naturally in the short-term. This freedom will enable us to respond quickly to opportunities that arise from our engagements with converters.’
Master Plastics will always strive to be a leader in the markets it plays in, rather than just being competitive. Part of this strategy, Manley insists, is ensuring that key personnel attend international packaging shows to stay abreast of trends and technologies. Another component is focusing on upgrading extrusion technologies and exploring more recyclable and sustainable material options, because improving the recyclability of flexible packaging is becoming an increasingly prominent consumer, brand owner and legislative demand.
The Group embraces the challenges thrown at it by customers and suppliers. ‘We always adopt a positive approach to problem-solving by electing to see the opportunity these challenges present the Group,’ Manley notes. ‘This approach has been a significant driver of our success to date.’