A return to success

23 June 2011



At London’s Sherlock Holmes Hotel in Baker Street, Joanne Hunter met Euro Packaging MD Darren Mosely to hear how the growing company hit tough times but has returned to great form.


Darren Mosley is responsible for UK and European business at Euro Packaging with a client base of major grocery retailers including Sainsbury’s, Tesco, Morrison’s, Co-operative Group and Carrefour.

Darren experienced the company’s helter-skelter years, but at our meeting he avoided an examination of why the downward spiral occurred. Still, clues to what happened come in the measures he has taken to revive the ailing company, wrapped up in a strategy to ’stabilise, optimise and grow’. The target is a10% uplift in sales turnover this year, to be achieved by continuing to diversify the product range, build on existing categories, and open up new markets, he tells me.

History

Business went well for Euro Packaging from its formation in 1974 by the Dubai-based Majid family, through to the 1986 entry of a second generation of Majid managers, and enjoyed two further decades of success. Then, in December 2006, the company was sold to private equity firm MidOcean, the idea being ‘to take the company to the next level’, Darren explains. But things went badly wrong at a time of high oil prices leading to high resin prices, while the supermarket plastics carrier bag – core to the company’s range – was coming under threat and literally had a price put on its head. During that time Euro Packaging was trading at a loss of £15 million/year and built up a £120m debt in less than three years.

The Majid family took back the reins in September 2009 and since then the UK-based management team has put the business on a profitable path. It boasts cash reserves with £25 million of working capital with no external borrowings and the buildings are fully owned and paid for.

There is no mystery attached to what will make Euro Packaging a success. “To service the sectors we serve we have to be a low-cost operator and invest for benefit,” says Darren.

Key to the turn-around was stripping out £11 million of costs without damaging the service, ‘focusing on core activities, taking away the peripherals, and knowing what’s important for customers, to add value not cost’. Once in a position to being able to re-invest, the must-have was a new, more efficient fleet of trucks, signalling a new momentum.

“Euro Packaging is well on its way to regaining its position as a leading packaging manufacturer. We are investing for flexibility. We are providing alternatives to plastics bags and offering ‘blended’ solutions. And we have opened an office in Switzerland for luxury packaging, an exciting new division producing handmade carrier bags and watch and jewellery presentation boxes.

“My intention is to develop the range we offer, develop our own capability and also further partnerships with the Far East, and East and West Europe.”

The company has been stabilised ‘on three legs’, as Darren puts it. Firstly, the re-distribution sector has access to some 3,500 SKUs: “No-one is bringing more containers of product than Euro Packaging.”

Secondly, extending the products and services for retail customers allows for consolidation, which is ‘a sensible route for procurement purposes’.

The third ‘leg’ concerns manufacturing capability and, in particular, recycling capability and addressing how to get recovered material from the marketplace and into product in a closed loop system. Darren expects to be able to introduce into mainland Europe the same model he proposes for the UK, starting with France, where Euro Packaging has a base in Marseilles – and Spain.“Being involved in the manufacture, sales and distribution of product give us some advantage,” he supposes.

Innovation is a core group activity, and he says: “We are one of the few in the sector to have our own R&D department, with five dedicated people. They are proactive and reactive, taking a client brief and, engaging in ‘blue sky’ thinking.

“As a proposition we think it is very powerful in terms of growth,” he continues. “And we are looking at building teams again, recruiting into buying and selling, design and manufacturing.”

Teams must understand the challenges, so he looks for good packaging industry experience to be able to handle fast changes and manoeuvre quickly, as circumstances dictate.

An ambitious target is 50% of sales outside of the UK by 2015, with Italy and Scandinavia next in its sights after France and Spain. Luxury is a growing sector, despite the economic situation, and it fits with company strategy. R&D is also high on the list of priorities for customers.

Career highlights

An extensive track record in foodservice was gained in senior roles including National Account controller – Bunzl and as Director of Foodservice with Anson.

Joined Euro Packaging Group in 2006 as MD of Ridley Quiney and served on the operation Board during Mid-Ocean’s tenure.

Became Group MD when the Majid family bought back the business in 2009.


Darren Mosely. Darren Mosely

Darren Mosely Darren Mosely


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