Before making an investment decision, a credit firm needed to understand how recent inflation in the cost of raw materials is impacting the business of the UK-headquartered packaging company Klöckner Pentaplast.
Klöckner Pentaplast, a manufacturer of plastic packaging, is among the energy-intensive industries exposed to the impacts of the Russia-Ukraine conflict. The increased cost of energy and materials, principally resins and additives derived from oil, used in the most of the company’s products, cut into Klöckner’s net revenue.
The GLG Approach
The GLG team connected our client with three leading industry experts with understanding of Klöckner Pentaplast’s business model and a context of the raw material pricing of PET and PVC, the current price pressures, and material supply shortages.
The insights from GLG’s Network Members informed a multifaceted research project. The project included a teleconference on latest performance analysis and outlook on Klöckner Pentaplast, run by a former Managing Director at a main competitor, phone calls with former C-level employees and competitors, and two phone consultations with a leading covenant lawyer to develop a deeper understanding of the covenants governing the deal. Following the consultations, the GLG expert commissioned two custom written reports focusing on value chain, procurement process, and PET and PVC raw material pricing outlook.
With insights based on first-hand expertise, the client formed a holistic perspective on the industry and company outlook in a context of increased energy costs and expensive manufacturing materials. GLG’s unique combination of research methodologies helped the client confidently make an investment decision.
GLG delivered insights needed to make an investment decision in a highly challenging trading environment.
- Multiple expert 1:1 calls
- Covenant analysis interpretation support
- Teleconference on company outlook
- Written reports focusing on value chain and raw material pricing
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