Smurfit still keen on deals despite £1.4bn investment
Packaging giant Smurfit Kappa is going to invest an extra €1.6bn (£1.4bn) in its business between now and 2021 as it seeks to drive superior returns from the group, according to chief executive Tony Smurfit.
It's the largest four-year investment plan ever initiated by the FTSE 100 company and will include new machinery, product innovation, depots and production plants.
But Mr Smurfit insisted the company - with revenues of €8.5bn (£7.5bn) last year and 64,000 customers including Pepsico, Aldi, Kellogg's and Unilever - won't shy away from acquisitions, as long as they can deliver value and returns for shareholders.
"We're backing ourselves," said Mr Smurfit of the investment plan, adding that the group is "not there yet" in terms of generating superior returns.
The packaging boss also revealed that Smurfit Kappa had walked away from €2bn (£1.8bn) in potential mergers and acquisitions (M&A) in the past "two-plus years".
"We're not giving up M&A," Mr Smurfit said.
"We have very significant capacity to do M&A... as long as it remains, long term, a good deal for the company.
"We're disciplined. We have done some and we continue to look at stuff, but we're only going to do it if it makes sense, if the quality of the asset is good and we can get a return over the long term."
Smurfit Kappa chief financial officer Ken Bowles said that opportunity for acquisitions remains and that the group has the firepower to undertake them.
The company completed two bolt-on acquisitions last year, buying facilities in Russia and Greece.