Our stock story this month features MPac Group PLC, a company whose shares we hold in our CFP Castlefield B.E.S.T Sustainable UK Smaller Companies Fund. We all dislike the environmental impact of packaging, but we all recognise its importance in keeping some products safe and fit for human consumption. Building the machines that assemble and pack food, medicine and other consumables, MPac is at the forefront of new developments in packaging and automation ecosystems. MPac is all about helping customers meet demand for eco-friendly packaging and reducing “pointless plastic”. The company is also making good inroads into the clean energy sector with the creation of assembly lines for lithium-ion batteries.
Based in Tadcaster, Mpac employs around 500 people and is a specialist provider of high-speed packaging and automation systems. They make the machines that assemble and package things, while aiming to do so in the most efficient manner. The company has production facilities in the US, Canada, Netherlands, Thailand, Singapore, as well as in Coventry and Tadcaster. The company has over 10,000 machines in service, situated in more than 80 countries. Mpac’s customers operate in areas such as Healthcare, Pharmaceuticals and Food & Beverage and include global brands like 3M, J&J, Nestlé, GSK, P&G, AstraZeneca, Unilever and Kellogg’s.
Although its environmental impact cannot be ignored, packaging is essential to many industries; it plays an important role in protecting a product from external elements including light, moisture, biological contamination and mechanical damage, thereby maintaining its security and quality. Packaging also protects goods during transport and storage, reducing product waste. In addition, it provides valuable information to the supplier and the customer about the product itself and it acts as a marketing tool to attract the customer and to differentiate the product from the competition. Types of Packaging Machine include, filling, labelling, form-fill-seal, cartoning, wrapping, palletizing, bottling line, etc. These days, there is an emphasis on high-speed packaging and automation solutions in all three areas of the process;
- Primary (i.e., assembling, filling and wrapping of products)
- Secondary (putting boxes in other boxes) and
- End-of-line packing equipment (cartons and pallets);
MPac’s equipment meets all of these needs.
As well as imaginative innovation and engineering, sustainable performance is a cornerstone of MPac’s strategy. Recognising the need to reduce the environmental footprint of the industry, the company has emerged as a leader in the use of efficient production techniques and best-in-class technologies, giving them exposure to several positive trends such as automation and the use of recyclables/biodegradable materials in packaging.
In July of last year, Mpac announced a contract with the Norwegian company FREYR Battery to supply assembly equipment for the battery cell production line at FREYR’s Customer Qualification Plant Mo i Rana, in the north of the country. The FREYR contract follows three years of cooperation with lithium-ion technology specialist 24M Technologies Inc, to industrialise and scale its SemiSolid lithium-ion battery technology. The successful delivery of the development line has the potential to provide Mpac with access to an exciting new clean energy sector. Additional day-to-day sustainability solutions from MPac include improving the lifespan and efficiency of its machines through innovative “whole life” servicing arrangements, helping manufacturers to remove “pointless plastics” from products and packaging as well as designing their machines to pack products more efficiently, making the cartons smaller and lighter, thereby reducing transport costs and associated carbon emissions.
We’re pleased to see that MPac’s management is looking forward to the future with confidence. The company has just opened a new facility in Cleveland, Ohio in order to get closer to its American customers. The new building is three times the size of the previous facility and features a state-of-the-art showroom for customers and much better amenities for employees, something which is increasingly important in the current labour market.
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Information is accurate as at 13.04.2022. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.