The document summarizes the past and present business models of the global industrial packaging industry. It discusses how the industry transitioned from family-owned cooperage and drum making businesses to large multi-national corporations. It outlines the current major business models: 1) family-owned reconditioners, 2) large national/global reconditioners, 3) stand-alone manufacturers, and 4) blended manufacturer/reconditioner companies. The document introduces a panel discussion on predicting the future of these business models in the industry.

1. FUTURE BUSINESS MODELS FOR THE GLOBAL
INDUSTRIAL PACKAGING INDUSTRY
Presented by
Paul W. Rankin, President
Reusable Industrial Packaging Association
To
15th
International Conference on Industrial Packaging
Vancouver, B.C.
5 June 2015

2. Future Business Models for the Global Industrial Packaging Industry
Good afternoon.
I am delighted to be here with you in what I believe is one of the most beautiful and livable
cities in North America and, perhaps, the world, Vancouver, B.C.
In just a few minutes, a distinguished panel of international industry leaders will present their
views on future business models for the global industrial packaging industry. I fully expect to
hear different points of view on this topic and, like you, I can’t wait to find out if our panelists
really can predict the future.
This afternoon I will present a brief description of the various business models found in today’s
global industrial packaging industry, and then moderate the panel discussion. The business
model descriptions are not intended to be comprehensive in scope – that would be a nearly
impossible task. Rather, they are intended to give you a general idea of how the businesses of
some of the leading manufacturing and reconditioning companies are organized. It will be up
to our panelists to talk in more detail not only about their own company’s business model, but
also what they believe were the key factors in their business choices along the way and how
current or emerging market conditions will impact the future of their companies.
As Mr. Murphy noted in his remarks yesterday about the history of the industry, the revered
wooden barrel was the cornerstone of our industry for nearly 2,000 years. Indeed, it was not
until the late 1800’s - when steel drums began to be produced in Europe and, soon thereafter,
in many other parts of the world – that wooden barrel usage began to decline and then virtually
disappear.
In the 18th and 19th centuries, the cooperage industry was composed almost exclusively of
family-owned companies, a trend that continued in the reconditioning industry all the way to
recent times. This was true the world over. The coopering trade – that is, the production of

3. both new wooden barrels and the repair of used barrels - was passed down through the
generations, often along with ownership of the company.
The new steel drum industry followed a somewhat different path to its success. Initially, these
firms were also family-owned businesses, but over time they gradually became subsidiaries of
the large steel manufacturing firms. Over time, in many parts of the world, the steel producers
gradually spun-off the drum makers. This is not the case in Japan, however, where new steel
drums are still made almost exclusively by subsidiaries of steel producers. Today, however, the
world of industrial packaging manufacturing is mostly dominated by large, multi-site corporate
entities.
In North America and Europe, for instance, an overwhelming percentage of industrial packaging
production come from the “Big Three” producers, i.e., Greif, Mauser and Schuetz, although
there remains plenty of market space for smaller single- and multi-site corporate producers,
such as The Bodtker Group in Canada and Berenfield in the U.S.
Until fairly recently, with a few exceptions, the businesses of reconditioning and new container
manufacturing remained separated all over the world. However, despite the fact that the two
industries were fiercely competitive and often even antagonistic, reconditioners often worked
with manufacturers to distribute large quantities of new containers to smaller accounts. This
cautious but mutually beneficial relationship continues to this day.
In the early 1990’s the businesses of industrial packaging manufacturing and reconditioning
entered a new era. Following several mostly unsuccessful attempts to consolidate significant
portions of the reconditioning industry in North America and Europe, and several efforts to
merge reconditioning with manufacturing, the concept of multi-plant national reconditioning
conglomerates finally took hold. Industrial Container Services (ICS), American ContainerNet
and National Container Group in the U.S and The Bodtker Group emerged in North America as

4. leading multi-plant reconditioning entities. More recently, Total Container Group has embarked
on a similar strategy in the U.S.
While the reconditioning industry was consolidating for growth and competitive reach, two
interesting trends were taking place amongst new container producers. First, several large
manufacturers began buying up their competition as a means of rationalizing an overcrowded
market place. Secondly, manufacturers entered the reconditioning business with the purchase
of strategically located reconditioning plants. Mauser, for example, now owns National
Container Group in the U.S., RTQ in Canada, several firms in South America, and a number of
other reconditioning entities globally. EarthMinded, which is affiliated with Greif, owns several
reconditioners in the U.S. and in Europe, including pack2pack. Schutz purchased a
reconditioning facility in the U.S. and has since opened several plants that re-bottle IBCs. The
Bodtker Group has been buying up both new production facilities and reconditioners across
Canada.
Japan and its sister nations in Asia and China have not followed this path. Reconditioning and
manufacturing remain essentially separate operations. It will be interesting to find out if our
panelists believe this is the way things will remain in that part of the world – we will likely find
out in just a few minutes.
In summary, the global industrial packaging industry is now operating under several broad
business models, as follows:
(1) Family-owned local or regional reconditioning companies. This model remains the norm
for reconditioners in much of the world, including Japan and China. However, these firms must
deal with not only the ordinary competitive problems any small business faces, but also
pressure from large, highly capitalized corporate reconditioners as well as reconditioners that
are owned by or affiliated with manufacturers.

5. (2) National or global reconditioners with sufficient size to bid on large corporate contracts.
This model exists in Europe, North America, Mexico and South America. These firms, several of
which are owned by private equity firms, are able to compete in either manufacturing or
reconditioning at just about any level – local, regional, national or in some cases international.
(3) Stand-alone manufacturing companies. This model is still common in the global
industry, but rapid consolidation of the manufacturing business is quickly reducing the number
of firms operating under this model.
(4) Blended manufacturer/reconditioner companies. Mauser, Schuetz, Greif, The Bodtker
Group and several other manufacturers own or are closely affiliated with substantial
reconditioning and/or reprocessing operations. A number of these firms possess global reach
with their manufacturing operations and appear to be trying to create a parallel opportunity in
the reconditioning side of their businesses. Not only do such firms possess superb access to the
capital markets, they are able to work closely with their reconditioning affiliates to offer
customers blended purchasing opportunities.
With this as background, it is now time to ask our panel members to step up and try their hand
at the difficult business of predicting the future. After each panel member provides you with a
brief outline of their own business model, I will ask them to respond to some questions about
the future of the industrial packaging business.