More consolidation among machinery suppliers probable
"Whenever markets come under a lot of pressure, there's inevitably more consolidation," explained the chief executive of the Processing & Packaging Machinery Association (PPMA) Chris Buxton. "That said, those firms with a stronger export portfolio that take a more global view always seems to fare better."
Consolidation can be one of the more effective tools in combating increased competition, according to the PPMA. "Other alternatives include cutting back your overheads, particularly the workforce, or turning to automation," said Buxton.
He said machinery sales among members have risen by at least 30% compared with last summer. In general terms, the manufacturing sector has not been hit as hard by the downturn as consumer-facing markets such as retail, he added.
Nonetheless, recent M&A moves have included the merger of G Mondini and Ulma Packaging in the UK. Robert Bosch has also been on the acquisition trail, though in pharmaceuticals this time, targeting Manesty's equipment business.
As with the Mondini-Ulma merger, there will be supposed benefits for end users in being able to source a wider range of equipment from a single supplier.
"Will there be a few more mergers and acquisitions?" asked Buxton. "I expect so. But assuming we're through the worst of the recession, I don't think we're likely to see a surge in M&A activity."
Greencore is among those companies saying they have not made any recent packaging equipment purchases. They, like other manufacturers, may not notice any change in the supplier landscape until they are again ready to invest and expand.
