Hart's packing a punch in China

Graeme Hart. Photo / Martin Sykes

The global beverage packaging company built by New Zealand billionaire Graeme Hart experienced a 50 per cent rise in sales in China in its third quarter as the impact of the melamine scandal faded.

Beverage Packaging Holdings Group this week reported a strong third quarter result due to savings in corporate overheads, procurement, logistics and other costs.

Cashflow management, lower raw material prices, lower capital expenditure and a general deleveraging of the business were also cited.

The company comprises packaging assets put together by Hart's Rank Group after buying Carter Holt Harvey.

The three main businesses are SIG, a manufacturer of aseptic carton packaging for beverages, Reynolds Consumer, a supplier of aluminium foil, plastic wraps and bags in the US, and a closures unit, which is the leading global supplier of plastic closures for drinks.

Beverage Packaging Holdings is not listed but has listed debt securities.

The SIG business reported a 41 per cent increase in adjusted earnings to €89 million ($183 million) in the third quarter. Margins increased from 21 per cent to 28 per cent.

A 5 per cent increase in revenue in the September quarter was driven by a 28 per cent rise in revenue outside Europe.

"The main driver clearly was China, which increased by 50 per cent in that quarter," said Rolf Stangl, who is chief executive of the SIG business.

"What you can certainly see here is that not only the market is growing significantly again in dairy after the melamine scandal but also we see the reversal effect of a very negative September last year when the melamine crisis started," he said.

"I think it surprised everyone in the industry how quickly China recovered, not only recovered but went back to old growth rates."

A decline in packaging sales in Europe was driven by lower sales in Poland and Russia where juice drinks are regarded as luxury items and were therefore affected by the economic downturn.

- NZPA