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Berry Global (BERY) Invests in Specialty Meltblown Asset

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Berry Global Group, Inc. (BERY - Free Report) increased its participation in the fight against the coronavirus pandemic. As a major manufacturer and distributor of non-woven specialty materials, the company holds an important place in the supply chain of healthcare materials.

Notably, it increased its investment in an additional specialty meltblown asset for the production of high-efficiency filtration media for the EMEIA markets. The company will work on incorporating its proprietary charging technology into the new line for delivering optimal filtration efficiency. Its investment will help cater to growth in customer demand for material required for premium applications, including FFP2 (N95) and FFP3 (N99) for cabin air filtration and industrial face-mask markets.

At the end of January 2020, the company prioritized the production of non-woven healthcare products in Nanhai and Suzhou facilities in China. It also shifted its capacity in the United States for delivering maximum output to cater to the growing demand for healthcare materials. In addition, the company noted that its meltblown production line is running at the full capacity in Europe for the production of materials required for face masks and other healthcare applications like materials utilized in blood filtration.

Our Take

Berry Global has been strengthening its product portfolio and leveraging business opportunities through the addition of assets. Notably, the company’s acquisition of RPC Group in July 2019 has been enhancing its growth opportunities by creating a leader in the plastic and recycled packaging industry. In first-quarter fiscal 2020 (ended Dec 28, 2019), the buyout added 38.4% to sales.

However, the Zacks Rank #3 (Hold) company is experiencing a weak operational performance across its Engineered Materials segment due to lower organic sales and a fall in selling prices. Also, its Health, Hygiene & Specialties segment has been witnessing soft organic sales on account of divestiture of its SFL business and customer product transitions in hygiene. The company expects the headwinds to persist in the near term.

In the past six months, the company has lost 9.8%, narrower than the industry’s decline of 15%.

 



 

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