
Flexible packaging, made from plastic films, aluminum foils, and fibers, is widely used in food packaging. While the overall market for food packaging has stagnated due to oversupply, high-performance products like retort pouches are expected to sustain growth, driven by the expansion of the convenience food market.
Industry Overview and Challenges
The production process for flexible packaging typically includes printing, laminating, slitting, and bag-making stages. Each step varies significantly in productivity depending on equipment capacity, workforce expertise, and lot sizes, directly impacting business competitiveness. In terms of product portfolio, vertical integration of flexible packaging by major food companies like Lotte, Nongshim, Dongwon, and SPC has heightened competition. Consequently, capabilities in high-value-added products like stand-up pouches and spouted pouches are critical for packaging companies to scale and maintain sustainability.
Environmental regulations also heavily influence the industry, especially regarding volatile organic compounds (VOC) emissions from printing and laminating processes. Factories located in metropolitan areas face stringent regulations under the Air Quality Improvement Act and the Chemical Substances Control Act, which necessitate detailed compliance and potentially significant investments for facility upgrades or relocations.
Client Context and Project Objectives
Following its acquisition of a leading Korean pouch manufacturer, the client, a global packaging company, implemented an internal PMI. However, challenges arose in formulating and executing an integrated production strategy that accounted for local regulatory and environmental complexities. Acting as the client’s local partner, Looxent collaborated with its European headquarters to conduct a comprehensive Production Strategy Project.
Key Deliverables
Environmental and Urban Planning Analysis
- Assessed regulatory requirements for environmental and safety permits.
- Evaluated the impact of urban development plans on current operations, including CAPEX and OPEX implications.
Relocation Feasibility Study
- Developed relocation options, including M&A, brownfield moves, and greenfield development.
- Compiled a long list of potential relocation sites and refined to a shortlist based on permit requirements and chemical regulations.
- Negotiated support incentives with local governments for shortlisted sites.
Facility and Investment Planning
- Drafted preliminary factory layouts for potential sites.
- Estimated investment costs and operational expenses required to meet capacity demands.
- Conducted financial feasibility and risk assessments for each site.
Execution Planning
- Recommended the optimal relocation option based on financial viability, operational feasibility, and risk mitigation.
- Developed an implementation milestone plan and a contingency strategy for potential risks.
Client Outcomes
The client secured approval from its headquarters based on Looxent's analysis and recommendations. The project was praised for its structured delivery of interim and final outputs, which facilitated informed decision-making. The client also valued Looxent's deep understanding of production operations and its ability to foster consensus among local and global stakeholders.
Looxent continues to support the implementation process and is exploring additional opportunities for operational optimization across Asia, including South Korea. The project demonstrates how localized expertise combined with a global perspective can address complex production strategy challenges.
Flexible packaging, made from plastic films, aluminum foils, and fibers, is widely used in food packaging. While the overall market for food packaging has stagnated due to oversupply, high-performance products like retort pouches are expected to sustain growth, driven by the expansion of the convenience food market.
Industry Overview and Challenges
The production process for flexible packaging typically includes printing, laminating, slitting, and bag-making stages. Each step varies significantly in productivity depending on equipment capacity, workforce expertise, and lot sizes, directly impacting business competitiveness. In terms of product portfolio, vertical integration of flexible packaging by major food companies like Lotte, Nongshim, Dongwon, and SPC has heightened competition. Consequently, capabilities in high-value-added products like stand-up pouches and spouted pouches are critical for packaging companies to scale and maintain sustainability.
Environmental regulations also heavily influence the industry, especially regarding volatile organic compounds (VOC) emissions from printing and laminating processes. Factories located in metropolitan areas face stringent regulations under the Air Quality Improvement Act and the Chemical Substances Control Act, which necessitate detailed compliance and potentially significant investments for facility upgrades or relocations.
Client Context and Project Objectives
Following its acquisition of a leading Korean pouch manufacturer, the client, a global packaging company, implemented an internal PMI. However, challenges arose in formulating and executing an integrated production strategy that accounted for local regulatory and environmental complexities. Acting as the client’s local partner, Looxent collaborated with its European headquarters to conduct a comprehensive Production Strategy Project.
Key Deliverables
Environmental and Urban Planning Analysis
Relocation Feasibility Study
Facility and Investment Planning
Execution Planning
Client Outcomes
The client secured approval from its headquarters based on Looxent's analysis and recommendations. The project was praised for its structured delivery of interim and final outputs, which facilitated informed decision-making. The client also valued Looxent's deep understanding of production operations and its ability to foster consensus among local and global stakeholders.
Looxent continues to support the implementation process and is exploring additional opportunities for operational optimization across Asia, including South Korea. The project demonstrates how localized expertise combined with a global perspective can address complex production strategy challenges.