September 2016
September 2016
Package manufacturing and distribution business, Orora (ASX:ORA), added to Ralton’s flagship Australian Shares portfolio during August with shareholders benefiting from a clean set of profit figures and a well-received strategy plan.
Since demerging from Amcor in late 2013, ORA’s management has delivered on promised synergies for the pulp mill in Australia and demonstrated an ability to expand ORA’s footprints in reasonably low-growth markets, such as glass bottling and dairy processing.
With Australian operations under control, ORA’s real success has been in the US.
The corrugated paper and packaging products division has achieved strong profit growth, aided by strong gains in market share, organic geographical expansions, a huge boost in operating margins and targeted acquisitions.
The US division has further expanded with the acquisition of IntegraColor earlier this year, a specialist package producer. IntegraColor’s key focus is the design and supply of various pop-up packaging (POP) products – the type seen at the bookend of supermarket aisles displaying products on promotion.
ORA intends to expand further in the US$10bn POP North American market. With a well-capitalised balance sheet, we expect ORA has considerable scope to consolidate what is currently a large unconsolidated market, often dominated by local players and no real national leader.
August 2016 reports