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Packaging decision could spell success or failure in the agriculture sector

08 May 2013

Selecting the correct packaging is a fundamental decision for players in South Africa’s beleaguered agriculture sector. Suppliers to local and international markets depend heavily on the durability of their chosen packaging to protect their produce on the journey from field to shelf. Amid existing socio-political challenges, unpredictable weather and dependence on exchange rates, this is one decision within their control that could spell the difference between success and failure.

Bruce Strong, CEO of leading paper and packaging company Mpact, says that innovation in the design and science behind packaging yields significant benefits in terms of cost savings, efficiency, brand equity and recognition. Mpact is the largest provider of corrugated and plastic packaging solutions to the South African agricultural sector.

Strong says that the expected fall in demand for agric packaging following the strike action among farm workers in the Cape has not materialised. This strong demand contributed to the company’s solid performance in their last financial year, where they were able to grow underlying operating profits by 11.6% and revenue by 10.9%.

“Good quality packaging is the one input cost that cannot be cut down on during times of crisis,” says Strong, “Farmers are dependent on purpose-built, robust, lightweight packaging to protect their produce so that they can achieve the best available prices.”

Innovative packaging solutions are the result of a number of important considerations regarding durability, weight, size and type of materials used. Packaging, whether corrugated or plastic, must be robust enough to protect the produce through to the retailer and ultimately, the consumer, to ensure that farmers get the best price for their goods.

Durability is particularly important for corrugated packaging, which is exposed to climate-controlled environments. Corrugated packaging must be able to withstand up to six weeks of refrigeration for the export market without compromising its strength.

Packaging also needs to have vertical strength when stacked to withstand up to 1 500 kilograms on the bottom layer. This is where the science behind packaging becomes critical; it needs to be robust enough for stacking and light enough to remain economical. Transport is a large cost for the agriculture sector and through innovation in light-weighting, Mpact is able to achieve cost reductions for their customers.

In Mpact’s Plastics division, the use of plastic jumbo bins instead of the traditional wooden bins has shown significant financial benefits in the agriculture industry. A study conducted for a fruit farm in the Grabouw-Elgin area in the Western Cape revealed total cost savings of R138.69 per bin per annum when switching from traditional wooden bins to Mpact’s Jumbo Bins, with a payback period of three years.

Plastic bins weigh 45% less than wooden bins, which enables quicker and safer handling and stacking. Bins can be vertically stacked up to eight units high because of a positive interlocking mechanism, which is safer than wooden bin and also means that more produce can be transported. Furthermore, the inbuilt ventilation reduces cooling time and saves energy, and a clean, non-porous surface provides a hygienic, bacteria-free environment. Ultimately this means that the produce arrives at its destination in a better condition when compared to wooden bins.

Mpact Plastic Containers manufactures a range of plastic containers used in the harvesting and processing of fruit and vegetables, while Mpact Corrugated manufactures and sells a comprehensive range of printed and unprinted converted corrugated products, including board, which we use to manufacture corrugated packaging, corrugated boxes, die-cut cases, folded glued cases, trays and point-of-sale displays. All packaging is custom-made to specific customer needs and can be printed as required on site.

Mpact Corrugated also manufactures Retail Ready Packaging.

“This is concept takes the marketing, communication and branding of products right on to the shop floor. It alleviates in-store stock replenishment, enhances consumers’ shopping experience and provides supply chain benefits,” says Strong.

Retail Ready Packaging is easy to identify in a warehouse with the artwork clearly depicting the contents and purpose of the product, and simple to open by hand without tearing the outer liner. In addition, the open cases can be accommodated on automated packing lines without requiring modification.

Since 2005, Mpact has invested in three high-graphic printing machines situated at the Springs, Pinetown and Epping facilities. This has given the packagers a leading position in high-graphic printing on corrugated boxes, in line with our objective of meeting customer requirements for innovative products and branding.

In addition, investment has been made in upgrading our fleet of corrugators at Springs, Kuils River, Nelspruit and Port Elizabeth, amongst others. This includes a R50 million investment at Kuils River, where a new high-speed BHS corrugator was installed, which holds the world record for production speeds.

“Our ongoing investment in modern technology, plants, people and infrastructure provides constant improvement to the products supplied and ensures that Mpact leads the field in the development of innovative packaging.”

Issued by:

FTI Consulting – Strategic Communications

Courtney Chennells 011 214 2404 / 082 775 4743 / Courtney.Chennells@fticonsulting.com
Trevor Jones 011 214 2414 / 083 326 7698 / Trevor.Jones@fticonsulting.com

On behalf of:

Mpact Limited

Deborah Chapman | Communications Manager, Mpact
+27 (0) 11 994 5500 / +27 (0)76 650 4155

Notes to editors

More high-res images are available on request.

Mpact is a leading southern African paper and plastics packaging group with revenues of R6.8bn in 2012. Mpact employs 3,790 people at 31 sites, of which 24 are manufacturing sites. Mpact earns approximately 10% of its sales outside of South Africa. It also has plants in Mozambique, Namibia and Zimbabwe. Mpact has the number one market position in corrugated packaging, recycled-based cartonboard and containerboard, recovered paper collection, PET preforms, styrene and PET trays and plastic jumbo bins. These accounted for approximately 90% of its revenue in 2011.

Source: Mpact