Graham Packaging aims for $300m in sales in Asia

The company is one of the world’s largest plastic container blow moulders with 80 factories in the Americas and Europe. But it is a newcomer in Asia, with very small sales volumes, even after its April acquisition of a factory in Guangzhou, Guangdong province and a smaller investment in India in 2009.

The firm seems intent on growing quickly in Asia, though, and more acquisitions and investments are planned to tap into growing consumer markets there and boost sales to between $200m and $300m in five years, with China being the most important market, said Daniel Yu, general manager of Asia for Graham Packaging.

In a July 21 interview at the Guangzhou factory Graham bought from China Roots Packaging, Yu said Graham is looking across East Asia, at China, Indonesia, Thailand and other Southeast Asia nations, and Japan.

“We really have a very ambitious target,” he said. “We see the market potential and the demand here. What we really have to do is apply our technology to go after the market.”

The firm’s Asian sales are small now, with the Guangzhou factory’s sales estimated at $16.5m.

But if it comes close to hitting its Asian goal of $300m, Graham’s sales there could be in the range of its second-largest region, Europe, where it had 2009 revenues of $235m.

Graham had worldwide sales of $2.8bn in 2009, with 85 percent of that in North America.

Yu said the company is actively evaluating further investments.

“The primary approach will be through mergers and acquisitions, and the secondary approach will be to build a plant in the case of very strategic single-customer relationships,” Yu said.

Globally, consumer product makers including Procter and Gamble, Unilever and Danone are among its largest customers. Graham plans to target their substantial operations in Asia.

Graham plans to focus on some of its traditional packaging markets, like food and beverage, personal care and automotive lubricants. It also plans to target local Chinese and Asian brand owners, who are growing in their market sophistication and demands for packaging, Yu said.

“The local brand owners are becoming more and more important potential [customers] for us, and in certain market segments they are the dominant players,” he said.

In China, for example, local firms have strong positions in markets like laundry detergent, while multinationals have stronger positions in shampoos and personal care products, he said.

He said Graham sees its advantages in China in two areas: design and technology.

The company has a 200-strong global design and engineering staff worldwide that it can leverage to improve package design in Asia, including light-weighting bottles to save on material costs, which Yu said is important in China’s very competitive domestic market.

“The Chinese companies are more aggressive in achieving light-weighting, especially in the fast moving consumer goods areas like water and juice,” he said.

Graham plans to add to its design capabilities in China, he said.

The other advantage Graham sees for itself in China is its proprietary technology for rotary wheel blow moulding machines, Yu said, which it claims improve efficiency and consistency in manufacturing in high-volume applications.

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