“Hostile” Describes More Than Just The Latest Consolidation Attempt
Monday, July 18, 2011
With the recent hostile takeover attempt by International Paper to acquire Inland Container's packaging division, the corrugated industry once again trends toward an even smaller group of companies driving the price of Linerboard. The Independent converter can again begin to worry that paper prices will increase regardless of the demand in the market. Rationaization of assets will begin to push up material prices for independents, without the corresponding support for finished box prices by the integrated producers.
The only hope in a market where so much supply control rests in such few hands, is to create value in every transaction. Whether reducing development time for new items to days rather than weeks, or creating new supply chain management tools to reduce customer inventories, smaller independent corrugated producers have to prepare for the market changes before we get trapped in the price battles that are inevitable with lagging demand and increasing material costs.