Over the past couple of years we have seen a rise in acquisition activity across many sectors, with companies seeking alternative ways to drive growth in order to tackle the on-going challenging market conditions.
One company that has proven successful with this strategy is DS Smith, a leading packaging business with a primary focus on the design, manufacturing and supply of corrugated packaging goods throughout Europe. Since joining the company as CEO in 2010, Miles Roberts has successfully implemented a new strategy intended to add value to their customer offering.
By using Mergers and Acquisitions (M&A), DS Smith has been building its presence throughout Europe and has a 16% market share of the fragmented packaging market, with plenty of scope for further growth. Economies of scale offer significant cost advantages over smaller competitors, as well as the ability to manufacture in large volumes and research better solutions for their customers needs.
One problem facing the industry is the cyclical nature of certain types of packaging, with demand and raw material pricing affecting sales. To tackle these risks, their strategy has been aimed at corrugated packaging for fast-moving consumer goods products. These day-to-day goods are in high demand globally and often have a relatively short shelf life, making them somewhat resilient to economic cycles. DS Smith has continued to invest significantly in innovation within this area to develop new solutions such as retail-ready packaging, whereby the goods are delivered to the retailer in a ready-to-sell merchandised unit that can be placed immediately on to the shelf without the need for unpacking.
This integrated business model also extends on to recycling and waste management services. With more companies wanting eco-friendly business plans, DS Smith differentiates itself from its peers by offering an all-in-one supply chain solution, whilst also helping to reduce their environmental footprint.
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