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Please remember to:
The Composite Can & Tube Institute's
2018 ANNUAL MEETING
April 16-18, 2018
Held in tandem with Pack Expo East, the CCTI Annual meeting will offer attendees networking opportunities, educational sessions, a plant tour, a retirement celebration for Emil Kiss! Each registration includes a complimentary Pack Expo East pass.
Reserve your hotel room by March 15th at 215-587-5570 and be sure to refer to the CCTI Room Block. If you have questions, please contact the CCTI office at 703-823-7234 or email@example.com.
Register online to attend the CCTI 2018 Annual Meeting
WestRock: Buys Another Consolidator
KapStone Paper (
) which in itself has been a serial acq
uirer, thereby combining two very entrepreneurial businesses, at least in the top management team. The deal to acq
uire KapStone, which adds about a fifth to WestRock's sales, looks fair as WestRock should be able to reap the benefits of the synergies, equal to a few dollars per share.
WestRock has agreed to
KapStone Paper and Packaging company in a deal which values equity of the target at $35 per share. Including a net debt load of $1.36 billion, the deal comes in just shy of the $5 billion mark at $4.9 billion. Investors in KapStone can either look forward to $35 per share in cash or 0.4981 shares of WestRock, with the stock consideration being capped at 25%.
WestRock is quick to point out that the deal values KapStone at a little less than 10 times EBITDA based on the annualised performance in the second half of 2017. KapStone has announced unaudited adjusted EBITDA of $130-135 million for the fourth quarter of 2017. If synergies are included, this multiple drops to 7 times EBITDA as the deal is set to be immediately accretive to earnings.
Manufacturing Companies Excited About Tax Bill Benefits
Manufacturers will save about $261 billion over the next decade thanks to the new Tax Cuts and Jobs Act. On paper, that should lead to new investments - in equipment, in workforce and beyond.
Steve Staub was headed west on Interstate 70 on Wednesday afternoon, back to his factory in Dayton after a meeting in Columbus with the Ohio Manufacturers' Association, when he turned on the radio and heard the news that Congress had
passed the Tax Cuts and Jobs Act. Around that same time, over in Washington, D.C., President Donald Trump walked from the Oval Office to the White House lawn to share his comments on his first major legislation.
"I campaigned on the fact that we're not going to lose our companies anymore," Trump said. "We are going to see at least $4 trillion come back into this country."
The broad reaction to the bill has been mixed, at best - a national tracking poll published earlier this week by Politico reported that 43% of about 2,000 registered voters supported the legislation, while 39% opposed it - but corporations in general and manufacturers in particular are bullish. The National Association of
Manufacturers reported Monday that more than 94% of manufacturing CEOs surveyed were positive about their company's outlook, and almost 63% said comprehensive business tax reform would encourage their own capital spending increases.
Count Staub among them.
Staub is the president of Staub Manufacturing Solutions , a contract metal fabrication shop in Dayton whose customer list dives into heavy truck, locomotive, construction, military and aerospace, among other industries. The company is not
large, but its head count has jumped from 23 to 33 just this year during a banner 2017, and Staub said he expects the passage of the tax bill to only help the company notch another strong year of growth.
"We're excited about it," Staub said. "I'm not an expert by any means on political stuff, but ... as a pass-through small business, it makes such a big difference on the amount of taxes, the money you can reinvest in the company. We can increase capital spending, hire more workers, increase wages, grow the business.
Manufacturers already benefit from a relatively low effective tax rate, but it will likely drop more under the plan - about six or seven points in 2018 - according to a new financial report from the Penn Wharton Budget Model . That report projects that manufacturers will save about $261 billion over the next decade. On paper, that
should lead to new investments - in equipment, in workforce and beyond.
And it's no surprise that companies represented by the National Association of Manufacturers - whose 94% optimism report was the highest in the 20 years the organization has surveyed its members - were pleased.
There are potential drawbacks, of course, even for industry. According to the Penn Wharton Budget Model report, the ability to immediately deduct the full cost of some capital equipment expires after five years, at the end of 2022. The bill also
effectively reduces the annual value of a tax credit for R&D investments. Still, the effective tax rate for manufacturers is expected to drop from 17.5% this year to 10.9% in 2018. Take advantage of that while you can, though: By 2027, it will
likely rebound back to 15.8%
Atos Signs Contract with Henkel Adhesives
Atos, a global leader in digital transformation, has signed a contract to deliver large-scale IT outsourcing services to Henkel, a global leader in adhesive technologies.
As part of the contract, Atos will be responsible for Henkel's Datacenter infrastructure, globally hosted in two main sites in Germany and the US. The new contract enables Henkel to react to the digitization of the market and to strengthen its position.Atos is Henkel's partner for managing their servers for applications as well as management and support for Oracle and SAP databases, Storage & Backup, Operations for Application Data, as well as Active Directory, File- and Print servers in remote locations.Atos will develop the existing datacenter landscape. At the core of the solution is a shared private cloud, which will provide Henkel with a foundation on which to run and manage all their applications easily and flexible.
Full story here.
Bureau of Economic Analysis Says US Economy Continues to Grow
The Bureau of Economic Analysis said that the U.S. economy grew by an annualized 2.6 percent in the fourth quarter, according to preliminary data. This was somewhat lower than the consensus estimate of around 3 percent, and it represented an easing from the 3.1 percent and 3.2 percent gains seen in the second and third quarters, respectively.
Overall, the latest report found solid growth in consumer, business and government spending, but headline growth was pulled lower by both net exports and inventory spending. To illustrate the impact of those various components, real GDP growth would have been 4.35 percent absent the drag from net exports and inventories, which subtracted 1.8 percentage points from the top-line growth figure. Personally, I would not be surprised to see the growth rate revised up in the coming weeks.
In 2017, real GDP increased by 2.3 percent, up from 1.5 percent in 2016. Since the end of the Great Recession, the U.S. economy has expanded by 2.2 percent on average. Moving forward, the NAM anticipates 3.0 percent growth in 2018-or something close to that. The consensus right now is for growth of around 2.7 percent. I continue to believe that there is upward potential in that outlook for next year, especially as firms increase their investments. Passage of comprehensive tax reform and other pro-growth measures should help to stimulate economic activity, which I hope will allow us to reach 3.0 percent annual growth for the first time since 2005.
On the manufacturing front, the news continues to be encouraging. For instance, the IHS Markit Flash U.S. Manufacturing PMI rose to 55.5 in January, its best reading since March 2015. New orders, output and exports all accelerated in January, with demand and production each at 12-month highs. At the same time, employment slowed somewhat in the latest survey, easing from December's hiring rate, which was the fastest since October 2014. In addition, manufacturing activity in the Kansas City and Richmond Federal Reserve Bank districts started the new year on a strong note, with continued expansions in demand, shipments and employment, among other indicators. Most importantly, manufacturers remained very optimistic about the next six months, even as they continued to predict a pickup in raw material prices.
In a similar way, European manufacturers cited healthy growth in activity in January, even as IHS Markit Flash Eurozone Manufacturing PMI pulled back slightly from its fastest pace since the survey was introduced in June 1997. Preliminary data for France and Germanyalso decelerated a little in January but remained not far from multiyear highs. Overall, new orders, output, exports and employment continued to signal strong expansions, and manufacturers in the Eurozone were very upbeat in the outlook for the first half of 2018, with the index for future output rising to its highest point since the measure was introduced in mid-2012.
Meanwhile, the Census Bureau said that new durable goods orders rose 2.9 percent in December, extending the 1.7 percent gain seen in November. The increase in both months stemmed largely from strong defense and nondefense aircraft and parts sales, keeping in mind that both sectors can be highly volatile from month to month. Excluding transportation equipment, new durable goods orders were up 0.6 percent in December, increasing for the sixth straight month. New durable goods orders have generally trended in the right direction over the course of the past 12 months. In fact, new durable goods orders have soared 11.5 percent since December 2016. With transportation equipment excluded, the year-over-year rate was a rather robust 8.2 percent.
This week will be a busy one, beginning with Janet Yellen chairing her last Federal Open Market Committee meeting on January 31 and February 1. Jay Powell, who was confirmed this week, will take over on February 4. Although the Federal Reserve is likely to raise short-term rates three times in 2018, no action is expected this week. It is widely anticipated the Federal Reserve will hike the federal funds rate during its March meeting.
On February 1, the Institute for Supply Management will report on manufacturing sentiment for January; it will likely find continued optimism about new orders, output and hiring. On average in 2017, manufacturers added 16,333 net new jobs each month. I anticipate that our first read on January employment will build on that momentum in what has been an ever-tightening labor market. Other highlights this week will include a new survey from the Dallas Federal Reserve Bank and updates on construction spending, consumer confidence, employment costs, factory orders and shipments and productivity and costs.
Caraustar Announces an 8.0% Price Increase on all Paper Tubes and Cores and Protective Packaging Products
Caraustar Industries, Inc. announced a price increase of 8.0% on all paper tube and core and protective packaging product lines. The increase will be effective starting with shipments on
March 12, 2018.
The increase is in response to strong market dynamics and inflationary cost pressures in transportation (both inbound and outbound), raw materials, chemicals and other material inputs.
Smart Manufacturing-It's Not (Just) Technology
Increasing emphasis on smart manufacturing in industry is exposing an unfortunate truth.
Competition between suppliers of advanced manu
facturing technologies has driven improvements in delivery and
quality while driving down costs. Though most new technology investments meet buyers' specifications, too many fail to deliver the business impact that originally justified the investment. Worse, the cost of delayed impact can be hard to measure. Which means that most business leaders just feel frustration at the performance gap and don't know where to turn.
Business leaders rarely care about the technology in which they invest. They measure success on the bottom line. They want invested capital to increase profits. And they want those financial gains to happen in a time-frame that supports the business's financial goals.
When an investment fails to fully deliver on financial goals, the cause usually has to do with factors adjacent to the installed technology, not the technology itself. Automation-enabled capital equipment can require tight integration of capabilities across the organization. Higher-precision processes that produce higher-performing products (at lower cost) place demands on a broad spectrum of operational and support activities within the business. Left unaddressed, these demands cause problems. Click here for the complete article.
Bio-Pappel Included in WWF's Environmental Paper Company Index for Sixth Consecutive Year
Mexico's largest paper and packaging producer Bio-Pappel has been included in the World Wildlife (WWF)'s Environmental Paper Company Index for the sixth consecutive year.
WWF's Environmental Paper Company is a biannual ranking of international companies that promote transparency and continuous improvement in the paper industry.
WWF included Bio-Pappel in its 2017 Index due to transparency and leadership in its operations and for best environmental management practices within its business groups and in its product lines of packaging, newsprint and writing paper.
Bio-Pappel produces around 2 million tonnes/yr of corrugated board packaging, recycled bond paper, paper bags, and newsprint.
Industrial Paper Tube, Inc.,
Industrial Paper Tube, Inc., located in Bronx, NY, is a paper tube and spool company for sale.
Spiral and convolute machinery for manufacturing 3/8 inch in diameter to 60 inch in diameter."
Please contact Howard Kramer at 718-893-5000 for prices and more information.
Industrial Paper Tube, Inc.
1335 East Bay Avenue
Bronx, NY 10474
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