Growing Globally to Serve Locally

Peter Grugeon, Justin Bennett, and Mathieu Nieuwenhuyse reflect on MCC’s recent acquisition of Herrods IML in Australia and what it means for the company’s increasingly global structure.

In March 2021, MCC Verstraete announced its acquisition of Melbourne, Australia-based Herrods IML (now known as MCC Verstraete Australia), a leading provider of injection molding label (IML) solutions in Australia and New Zealand. Both MCC Verstraete and Herrods IML began as humble, family-run businesses and quickly grew to become important players in the IML landscape. By joining forces, we strengthened our market position on a local and global level, and MCC Verstraete gained a foothold in Australia and New Zealand markets, as well as Asia.

In addition to this new expansion, MCC Verstraete has also operated a production plant in US-based Batavia, Ohio since 2018. As the company continues to grow around the world, we interviewed key members of the MCC Verstraete team to learn more about its global structure and what this new acquisition means for the company, including future expansion plans and MCC Verstraete’s ability to respond to new packaging trends.

Below, dive into our global conversation with Managing Director of MCC Verstraete Peter Grugeon who is based in Maldegem, Belgium, General Manager of MCC Verstraete Australia Justin Bennett who is based in Melbourne, Australia, and General Manager of MCC Verstraete North America Mathieu Nieuwenhuyse who is based in Cincinnati, Ohio.

What was the main reason for MCC Verstraete’s acquisition of Herrods IML?

Peter Grugeon: COVID reinforced the idea for us that, in regions where MCC has a presence and market share, it’s important to be locally present - present not only with a sales office, but also a production facility. The reasons are two-fold. One, it’s important to stay close to our customers, to understand them very well, and to eventually also be active in the same time zone. And secondly, around the world, we see a move away from globalization towards local production again — a trend accelerated by the logistics issues seen during the pandemic.

Justin Bennett: I would add the general consensus has been that at some point, the IML label industry would be strengthened by this acquisition. This was not a surprise, rather more like a predicted outcome.

Peter Grugeon

Managing Director of MCC Verstraete

Justin Bennett

General Manager of MCC Verstraete Australia

How has the merger process been for Herrods IML?

Justin: Integration has been an in-depth process involving many meetings, trainings, and different procedures and reporting. These changes, although improvements, have been a shift in the agile, less formal way that our business has been run over the years. It has been challenging, but we are now on the other side of those challenges and will start to reap the benefits.

After this acquisition, what is MCC Verstraete’s global structure?

Peter: Since we believe that we should act close to our markets, we have decided to place general managers in North America and Australia, in addition to our headquarters in Belgium. On a monthly basis, we come together to exchange information and make decisions, but autonomy is also granted locally in each country — and that is important. If we want to make quick decisions in a fast-growing environment, we need to give some autonomy in the market. Now, our operations for Europe, the Middle East, and Africa are managed from Belgium, the Americas are managed from North America, and Asia-Pacific from Australia. In total, we employ around 700 people, approximately 550 in Belgium, close to 100 in North America, and just over 60 in Australia.

“Herrods has always been well regarded for its high quality of service with a friendly smile, but now our reputation has been strengthened by the partnership.”

Justin Bennett, General Manager of MCC Verstraete Australia

What are the main benefits of this acquisition for MCC Verstraete and its customers?

Peter: With this acquisition, MCC Verstraete became the market leader in the Australian market, and for our Asian

customers, there will be a lot of opportunities to source from the Australian plant, rather than only from Belgium. Justin: Being part of a much bigger group gives Herrods IML and the Australian IML industry more opportunity to grow. This, coupled with the market leaders in IML no longer being competitors but partners, means that best practices and intellectual property can be shared between sites. Herrods has always been well regarded for its high quality of service with a friendly smile, but now our reputation has been strengthened by the partnership. Obviously, the high focus on sustainability and other innovations that MCC Verstraete has to offer is very beneficial to our business and the future of the plastic packaging market too.

Does MCC Verstraete have any further expansion plans?

Mathieu Nieuwenhuyse: Over the last four years, we have increased the capacity of MCC North America to serve about 55% of the North American market needs, as well as some projects in Mexico. Further investments are planned to cover the market needs and strong IML growth here, so we will gradually build the Mathieu Nieuwenhuyse capacity and continue to invest in our General Manager of MCC local production strategy. Verstraete North America Peter: As Mathieu explained, our growth is concentrated in North America and the Americas, but we have also been working intensively on some breakthrough innovations linked to the sustainability challenges and opportunities that lie in front of us, and those are expected to bring us some further growth in Europe and other parts of the world.

You just mentioned sustainability — can you touch on what trends you see in the packaging industry and how they affect MCC Verstraete’s business strategy? Peter: Plastics often have a rather negative perception,

“The ultimate dream for us is that recycled polypropylene (rPP) will become widely available on the market, just as recycled PET already is.”

Peter Grugeon, Managing Director of MCC Verstraete

and unrightfully so. When we can recycle packaging material, plastic packaging remains the best solution there is, but that is a more difficult message to spread. So, we need to have courage as an industry to share the right message, and to explain the reality of things. Overall, as the focus on circular economy is increasing and investment is directed accordingly, the future of the plastics industry will be shaped in the next years with a strong focus on mono-material solutions. MCC Verstraete has a strong role to play in that story. Today, we are offering solutions that should allow IML packaging to be fully recyclable as well as circular. The ultimate dream for us is that recycled polypropylene (rPP) will become widely available on the market, just as recycled PET already is.

Mathieu: Next to that, we also see the trend of smaller packaging sizes and the rapid growth of IML, which is now replacing some other types of packaging in North America due to labor shortages. Producing IML packaging is a one-step process, which, labor-wise, is much less complex than some other solutions that require two or three steps.

What other sustainability solutions is MCC Verstraete focusing on at the moment?

Peter: I would like to highlight NextCycle IML™, which

we consider to be the next generation of IML labels. This label solution allows a fully decorated IML packaging to be mechanically recycled without any impact of the IML label on the recycled PP. In a classic recycling process as it exists and is applied today, the NextCycle IML™ label is separated from the container, and a clear stream of container flakes without any ink contamination is generated without the need for any extra investments by the recyclers.

A second important innovation motivated by the trend to use less plastics is Molded Fiber Labeling™. It’s a unique labeling solution for molded fiber tubs which can, for some applications, serve as an alternative to polypropylene packaging. Together with Pagès, we have developed a solution to label this type of packaging using a glue free paper MFL label applicable to both dry and wet fiber molding.

Mathieu: Additionally, I would mention SealPPeel, as we see there is huge interest for this solution right now. SealPPeel offers a polypropylene alternative to aluminum lidding, such as the ones used to sealing yogurt tubs or other cups. In combination with a polypropylene tub, the packaging is mono-material, ensuring easy sorting and recyclability.

MCC Verstraete recently launched its customer portal that allows customers to order IML labels online. What is the value of this? And are there any other services that will be added in the future?

Mathieu: This is all about smart, digital communication. Ordering labels should be easy, fast, and reliable. The portal is available 24/7 and provides immediate and instant pricing. Orders can be entered directly into the portal by our customers or they can simply upload their order document. In addition, price lists and pricing simulations can be found in the pricing tool. It also allows customers to manage their artworks online — artworks can be stored in an online library and directly approved. The initial feedback has been very positive. Our customers are recognizing the system as a time saver, and we all know that time is money. We are in constant contact with our customers to identify needs that can be served through the portal. So far, we’ve only made small adaptations, but we are planning to respond to further needs that may appear in the future.

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