MWV outlines packaging growth strategy

MeadWestvaco Corporation (MWV) is targeting average annual gains of 5-10 percent in its global packaging business to provide profitable growth and deliver top-quartile shareholder returns.
 
Presenting to investors and analysts this month (December), senior MWV leaders presented strategies for achieving this target by continuing to leverage the strong packaging platform the company has built to serve targeted end markets, including food, beverage, tobacco, personal care, home and garden, healthcare, as well as corrugated packaging in Brazil.
 
The company highlighted the strategies it is executing across three principal growth levers, namely commercial excellence, innovation and emerging markets, to deliver on the target. MWV believes these strategies can deliver more than US$1 billion of incremental revenue over the next three to five years.
 
Via commercial excellence, MWV detailed its approach to identifying top priority customers based on profit potential, and then building or enhancing partnerships with those customers to create innovative solutions. The company said its strategy is centered on leveraging its broad packaging capabilities to grow its share of business with the world’s largest and most successful consumer packaged goods and retail companies to take advantage of new and expanding revenue opportunities over the next three to five years.
 
Through innovation, the company outlined how it is using consumer insight capabilities in conjunction with open innovation and expertise in materials science and packaging design to accelerate speed to market with new products. MWV featured several examples of innovative new products that are in the later stages of development. These innovations will help drive increased high margin revenue over the next three to five years.
 
In emerging markets MWV said it has a long and successful history and is already expanding its advantaged platform in Brazil (MWV Rigesa). In addition, there are now strategies for growing its business in China, as well as scaling up its participation in India. MWV said it is addressing each region’s unique needs and opportunities with a broad set of packaging capabilities and believes continued penetration of its packaging products and solutions in these markets will generate greater incremental revenue over the next three to five years.
 
John A. Luke, Jr., MWV chairman and chief executive officer, said: ‘We have the ability to drive sustainable, profitable growth by bringing our packaging capabilities, including deep end-market knowledge and consumer insights, to create partnerships with our customers that leverage our entire global platform. We are growing with our customers, particularly in faster growing emerging markets where we already have significant and scalable platforms. As we deliver the packaging solutions our leading consumer packaged goods customers need to grow their businesses around the world, we are creating higher value for our shareholders.’
 
Mark Rajkowski, senior vice president and chief financial officer at MWV, said: ‘We have built a strong business model that is already delivering improved financial performance. The profitable growth plans for our packaging businesses that we outlined today centered on packaging reflect a growth engine that will deliver higher operating margins and substantial cash flows that we will use to reinvest in our business and to increase returns to shareholders.’