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Effective Global Supply Chain Management Strengthens Business Practices for PET Resin and Sheet Packaging Manufacturers

Effective Global Supply Chain Management Strengthens Business Practices for PET Resin and Sheet Packaging Manufacturers

Press Release – Supply Chain and Logistics September 22 2014

Effective Global Supply Chain Management Strengthens Business Practices for PET Resin and Sheet Packaging Manufacturers

In the global packaging manufacturing industry, the cost effective and reliable delivery of high volumes of packaging materials to virtually all corners of the globe is a mission critical capability. Packaging manufacturers must position themselves strategically within the global supply chain – both geographically and operationally – to ensure they can deliver on the promise of being a continuously reliable supplier.

The global supply chain refers to the flow of goods from points of origin to end consumers. All involved networks and businesses, including raw material suppliers, converters, manufacturers, packagers, and end consumers, are part of this supply chain. Effective and flexible global supply chain management is fundamental to successful business operations of packaging manufacturers, especially since manufacturers always face other unpredictable changes and fluctuations within the market that stress the supply chain.

Variable factors within local and global markets, such as economic fluctuations, inflation, and environmental conditions, affect production, supply and cost. An Ernst & Young report states that, "the procurement of globally traded raw materials is a mix of art and science. Commodity raw material prices are driven by global energy prices and supply capacity, which change every week. In such markets, supply can fluctuate with the global economy, regional weather conditions and many other factors. As a result, striking the balance between security of supply and low pricing volatility is a crucial skill for packaging manufacturers."{1} Flexible and adaptable business strategies are necessary for navigating such fluctuations, and one of those strategies is location.

The same Ernst & Young report states that, "maintaining an effective supply chain and operations network for a packaging business is complex. As a general rule, the location of the plant is a key driver of the economics."{1} Strategic facility location strengthens a companies’ reliability and consistency within the global market, and its overall position within the global supply chain. OCTAL offers this advantage with the location of its facility in the port of Salalah, with access to East-West shipping lanes.

Companies around the world rely on guaranteed, timely delivery of packaging materials necessary for their own manufacturing processes. By building a facility central and accessible to global shipping lanes, OCTAL shortened its supply chain and is able to offer reliable deliveries and attractive lead times. The demands of production schedules cause many food packaging manufacturers and other companies to require timely door-to-door delivery, which is a service OCTAL offers. OCTAL ships PET resin and DPET sheet to any packaging manufacturing location, directly from its facility in the port of Salalah.

In addition, delivery terms for OCTAL products are Delivered Duty Paid (DDP). DDP shipping agreements mean that all costs are included in the price of the product so the customer only need be concerned with paying one bill, not managing freight issues. OCTAL’s COO, William J. Barenberg Jr., explains that, "[the] DDP agreement makes for a very clean transaction for the customer. They don’t need to worry about customs, import duty or managing the logistics and delivery." He adds that, "this shipping option, along with other available custom shipping agreements [and] door-to-door delivery has allowed our customers to gain additional benefits by selecting OCTAL as their supplier of PET resin and DPET sheet."

OCTAL’s location and delivery platform are key factors in the company’s supply chain management, which delivers a competitive for a valuable position within the global market. As Barenberg stated, "Octal is building its brand on a truly global scale," and its global supply chain management is a major factor in its success.

The current practices at OCTAL, as well as future prospects of the company, are summed up by Barenberg in his statement that, "PET is becoming the unanimous choice for high performance, clear rigid packaging in wide range of applications and our aim is to expand our market leadership, both within our existing markets and in packaging segments and geographies. Today, the company exports to more than 70 countries around the world and provides clear rigid packaging solutions to some of the titans of food and consumer products industries, including Coca-Cola, Nestlé, P&G, Walmart and Almarai to name just a few. By growing our profitable PET resin business, we have established a strong and stable base from which to drive our company’s continued expansion."

 

Today’s global food packaging companies need suppliers that employ innovative business strategies, enabling the necessary flexibility and adaptability that promote success and growth within the market, despite local or global changes. OCTAL, the world’s largest PET sheet producer, has developed a company structure that is built around meeting these needs. Facility locations and innovative shipping practices are strategic factors in OCTAL’s effective global supply chain management, which shortens the supply chain, ensures supply continuity and minimizes costs. The business strategies employed by OCTAL offer the potential for growth and success to other networks and companies within the global market and supply chain.

 

About OCTAL:

Oman-based OCTAL has emerged as the largest PET sheet producer and integrated packaging company in the world. Operating from the Salalah Free Zone, the company has successfully harnessed unique-to-the-world manufacturing capabilities, along with strategic location and favorable trading regulations, to meet the breadth and depth of customer demands across the globe.

OCTAL’s facility expansion has added 600,000 tons per annum of PET bottle-grade resin to the company’s production capacity, enabling production to reach 1 million tons per annum, making it the largest PET producer in the world on one site.

As manufacturers of PET resin and the first and only direct-to-sheet polyester sheet in the world, DPET, OCTAL’s state-of-the-art plant was designed and built to yield superior quality products. Facility design and practices are guided by the benefits of waste reduction and sustainability, and OCTAL considers environmental performance integral to business performance. Through applying the most advanced technologies, OCTAL has set new global benchmarks for both product and environmental excellence.

 

For more information, please visit: www.octal.com

 

Sources:

1-http://www.ey.com/Publication/vwLUAssets/Unwrapping_the_packaging_industry_%E2%80%93_seven_factors_for_success/$FILE/EY_Unwrapping_the_packaging_industry_-_seven_success_factors.pdf