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Meat helps Sealed Air beat economic blues

By Rod Addy , 20-Feb-2013

Meat solutions in the Americas helped Sealed Air Corporation offset struggles in tough markets during its fourth financial quarter (Q4), according to president and chief executive officer Jerome Peribere.

Commenting on the company’s Q4 performance for period ending December 31 2012, Peribere said Latin America had proved to be a strong performer in the meat segment. His comments came during a conference call on February 19.

“Regionally, we have double-digit growth in … Latin America, where our established footprint and strong market presence in Brazil allowed us to benefit from the rising beef production rate in that country.

“And while protein supplies in North America have negatively impacted our year-over-year performance, we continue to outperform the industry growth rate.”

Red meat packaging

Sealed Air’s North America fresh red meat packaging product increased sales by approximately 2% compared with an almost 5% decline in beef supply in the region. The gain was partially offset by pricing pressures and raw material cost increases.

Globally, the company continued to pursue a robust innovation strategy, investing $140m in research and development this year and launching more than a dozen products in 2012, said Peribere. These “drove new sales across multiple regions”, he added.

Global food & beverage (F&B) sales in the fourth quarter increased 2.4% on a constant dollar basis, said Peribere, also reporting 1.7% growth in food packaging and food solutions.

Food safety, convenient packaging

The main aspects fuelling that growth were food safety and security concerns and consumers’ increased demand for convenient packaging, he said.

He singled out the Grip & Tear feature on bags, easy open/reclose on rollstock, including Sealed Air’s new FoldLOK pouch system and ovenable materials.

“Among the products we are most excited about are the Grip & Tear bags. This barrier bag is designed to provide a convenient feature for opening a vacuum package,” said Peribere.

Easy opening feature

“This product is typically used for in-the-bag merchandising of products that benefit from extended shelf life. And in most cases, the easy opening feature is accompanied by printed instruction for promotional cooking of the product.”

Referring to the demand for food safety and security, he said: “…We eat more meals outside the home and more food and ingredients come from all over the world.

“Our Freshness Plus films combined with our Vertical Pouch Packaging program not only keep food safe as it travels longer distance, it extends shelf life and maintains the integrity of the ingredient. Our Vertical Pouch Packaging programme has expanded by near double-digit rate.”

The figures

Sealed Air’s global operating profit in Q4, 2012 more than doubled, from $47.5m to $118.2m, on net sales up slightly, from $1.96bn to $1.98bn, compared with Q4 in 2011.

Summarising full-year figures, Sealed Air reported net sales up $7.6bn, a 37.8% increase over 2011. Adjusted 2012 pre-tax profit was $1.02bn, 2.8% higher over pro forma 2011 pre-tax profit of $996m. Strong cost synergies had helped performance, it said.

Peribere predicted modest sales and pre-tax profit growth for 2013, despite struggling markedly in Europe and the continued upward march of raw material costs.

Sales had fallen by 3% across Europe off the back of the weak economy, with most countries showing declines.

Sealed Air’s F&B division represents roughly half of its total sales, with the rest coming from its Institutional & Laundry (28%) and Protective Packaging (21%) divisions.

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