Business model and strategy

Going for Growth

Our plans were set out last year to develop the business through organic growth in our target markets of Pharmaceutical, Healthcare, Food and Beverage. To enable this, we created a global sales approach under our single entity model, offering innovative Packaging Machinery solutions from our extensive portfolio of engineered modules.

The sale of the I&TM division during the year was transformational in supporting our growth strategy. This move will accelerate progress in achieving our strategic aims with the entire focus of the continuing business being the growth markets of Pharmaceutical, Healthcare, Food and Beverage.

The commercial excellence programme implemented last year for our global sales and sales support teams was focused on providing professional training on strategic selling to bring the whole team to a consistent, higher level of performance and on to a common set of processes and procedures. This new methodology has been positively adopted and embedded in our CRM system which provides strong pipeline management tools.

The move to a new showcase facility in Mississauga, near Toronto, Canada, was successfully completed and provides a customer focused environment. The innovation centre, customer acceptance zones and multiple break out rooms will ensure that we develop even closer customer relationships.

Similarly, post-sale of the I&TM division a new office was established in Singapore in order to ensure our customers continue to have locally embedded support and to provide us scope to develop our growth plans.

During 2018 we will launch the new name and branding of Mpac through all communication channels and showcase the new identity branding at major regional exhibitions.

We will continue our commercial excellence programme with further training modules aimed at increasing our win ratio and extending our geographic reach.

Key account management growth with existing customers is a clear target, ensuring we better understand their evolving needs and extend our customer proposition with a broader solution approach.

The growth will be supported by an exciting schedule of new product launches during 2018.

Make Service a Business

Our customers have an extensive globally installed base which they expect to run continuously at high levels of Overall Equipment Effectiveness. The trends towards Industry 4.0 and its enabling technological platforms support our strategy to work with our customers to ensure that they maximise their return on investment throughout the life-cycle of the equipment. We can offer comprehensive service programmes to maximise uptime and minimise cost of production through our global service business.

A new Service business leadership team was formed during the year bringing in the necessary skills and mindset to bring focus to this opportunity and offer deliverable implementation plans. Onboarding the new team and structure has begun and is key to the future success.

The new facilities in Mississauga and Singapore together with our European bases provide our customers with local direct support and a network of expert knowledge to draw upon.

An exercise was completed to verify the installed base and to assess potential customer productivity improvement opportunities leading to progress on developing service agreements with key customers.

The focus for the coming year will be to ensure that the newly formed Service business team work closely with every customer to understand their needs and to tailor service programme agreements aimed at productivity improvements.

Excellence in Service will also be an initiative focused on quick response and high spare part availability for our global customers.

Service business growth will be supported by new product launches during the year enabling customers to optimise their production processes and improve product quality through greater equipment connectivity, data extraction and interpretation.

Operational Efficiency

Our stated aim is to be customer focused, responsive and flexible through organisational excellence, underpinned by a global supply chain and supported by a single entity operating model. The disposal of the I&TM division reduced the complexity of the Group and changed the focus on the strategic priorities from right sizing to productivity improvements through the integration of a common systems platform.

A key focus during the year has been to build and develop the organisational structure and skills to deliver the building block of the Operational Efficiency initiative and as a result the capabilities to implement the strategic elements of our plan. This has resulted in changes to the site leadership in Mississauga and Wijchen.

The new operational leadership team’s strategic focus during 2018 will be to integrate the project management, engineering and supply chains for the three operational sites. This will provide our customers with a flexible and responsive global entity able to work simultaneously on packaging solutions, increasing productivity, pooling knowledge, and leveraging a common supply chain, resulting in reduced lead times and improved competitiveness.

Market opportunity

Packaging machinery solutions is a very broad sector and our accessible markets, Pharmaceutical, Healthcare, Food and Beverage are growing at around 5% per annum, driven by macroeconomic factors such as urbanisation, convenience and health awareness.

Mpac has an excellent portfolio of global FMCG customers, together with large regional players in accessible and attractive growth markets. In addition, we have a large installed base, and with customers demanding ever increasing operating equipment efficiencies, we believe there exists a real opportunity to develop a contractual based service support model that would add incremental revenues to Mpac.

Growth rates for packaged products vary significantly by region, depending on their phase of economic development. Asia, South America and Africa are each forecast to grow between 3 to 5% per annum in packaging, driven by urbanisation and convenience, whereas in Europe and North America, where populations are more stable, growth is forecast to be driven by premiumisation and health awareness. Mpac has an embedded global footprint and is therefore well positioned to exploit the opportunities that market growth brings.

The extensive product range of process and packaging machinery solutions supports the whole Make, Pack, Test, Service cycle. This encompasses primary packaging, secondary packaging, instrumentation and servicing of equipment. Our Langen and Mpac brands have solutions focused on the Pharmaceutical, Healthcare, Food and Beverage sectors. Our business offers a concept feasibility service to customers, which is key in establishing a development partnership with the customer at the onset of a new innovation in product processing and packaging. This can be leveraged across our global key account customers to ensure Mpac is in pole position to partner on new projects.

The innovative high speed packaging solutions available within the Group support the customer need for a full solution provider and the Group has the necessary platforms to support the increased market demand for data capture and product traceability throughout the production process.

Mission

› To be a global leader of high speed packaging solutions focused on attractive growth markets enhanced by a world class service offer programme to ensure maximum return on customer investments;

› Customer focused, responsive and flexible through operational excellence underpinned by
a global competitive supply chain and internal activities
optimised to maximise efficiency;

› Broaden application and customer scope by leveraging market leading technology and application know-how.

Business model

The Group offers its customers a packaging solution customised to their requirements using a portfolio of proven modules augmented with a customer specific product package handling solution, which is supported by 15% of our employees being qualified engineers with in depth knowledge and know how.

The next phase is contract engineering, procurement and manufacturing, leading to assembly, test and then site delivery and customer acceptance. Common processes are all monitored and controlled by effective project management. Service support is then provided through the life of the product at the customers’ sites.

The capital equipment market is cyclical by its nature with a high need for responsiveness and flexibility to adapt to customer demands and lead time needs, seizing the opportunities as they arise.

The opportunity exists to exploit synergies across the Group, utilising best practice across the sites and a shared services resource in order to improve the operational efficiencies.

This creates a model whereby we can increase utilisation with the ability to expand capacity with increased demand and reduce capacity in periods of lower demand.

This leads to the transition to a single enterprise business model – One Mpac.

2017 progress

› Commercial excellence programme
› Drive regional sales structure
› Launch Mpac identity
› Pipeline management – CRM › Create Services business
› Secure installed base
› New location and build the team
› Deliver first service agreements › Embed new “One” organisation
› Move to showcase new facility
› Build Site Leadership Teams
› Supply chain optimisation

Future plans

› Full solution selling
› Product development roadmap
› Key account development
› Brand and product management › Life-cycle ROI proposition
› Promote contractual agreements
› Develop product portfolio
› Incorporate Industry 4.0 › Employee engagement and recognition
› Shared Engineering and Project Management platforms
› Global supply chain
› KPIs to support strategy

Key Opportunities

The market and customer demands are evolving, with a clear need for full solutions to their packaging requirements supported by a comprehensive services proposition to ensure maximised return on their investments. Demand for data capture and traceability throughout the product life-cycle is also an increasing trend.

By utilising the impressive array of innovative engineering solutions throughout the Mpac sites, supported by a focused product development roadmap targeted on the attractive growth markets, we will be well positioned to deliver growth beyond industry forecasts.

The Group offers first-of-a-kind innovative solutions, working with the customers’ product development engineers and marketing functions on the next generation of innovative products. By partnering with these key global customers, Mpac will be well positioned to support the customer from prototype to series production. This capability should be leveraged across our global sales team and into our global key accounts and prospects.

In particular, Service represents a key opportunity based on a substantial installed base. This will benefit from a detailed review of current customers to assess the potential additional revenue opportunities and a customer focused approach to transition to contractual agreements aimed at improved equipment utilisation and therefore customer return
on investment.

Product innovation and development is key to growth in the large and attractive markets we operate in. Our current product development roadmap is being critically reviewed to ensure it is realigned to effectively support customer trends in the identified growth markets.

Innovations to the current product range are planned to address short term needs as well as regional nuances, supported by a longer term roadmap to ensure we supplement the full solution objective in our target markets and address emerging customer demand for increased data capture to support maximised utilisation and product conformity.

A move to a regionally focused, single business entity model has been implemented. New sales and service regions have been created for the Americas, EMEA and Asia Pacific. This is supported by a global service business, operations and shared services function.

Customer responsiveness and reduced lead times are key competitive advantages and as such we need to continuously improve. By working on a global basis, operations and shared services will be better able to increase operational efficiencies, whilst simultaneously creating a flexible and responsive manufacturing base and supply chain to quickly adapt to changes in customer demand and investment cycles.