Page 2: Strategy and vision
Rexam is the world’s leading maker of beverage cans and its fifth largest consumer packaging company. Rexam manufactures a wide range of products including lipstick cases, beverage cans, margarine tubs and glass containers. Rexam’s ambition is to be the global leader in consumer packaging, concentrating on a chosen number of specialist segments and providing its customers with a quality of product and service that is second to none. Leading does not necessarily relate to size. Rexam’s vision is to become large enough to be an excellent supplier to its global customers and also an interesting customer for its suppliers. Its aim is to be leading in service, innovation, efficiency and quality. It is also looking to create and sustain a stimulating and rewarding environment for its employees.
Rexam came together as a group of companies in 1995. The various companies under the Rexam banner manufactured a range of products from diesel engines to windows and packaging to make-up cases. This breadth was typical of many large companies in the late 1980s in an era when businesses thought that there were benefits to be gained from diversification.
Following Rexam’s creation as a single organisation, it went through a period of profound change. After a strategic rethink in 1996, it embarked on a period of divestment and acquisition to focus the group on the area of consumer packaging. Its strategy was to concentrate on a limited number of packaging segments and become leader in these segments. Rexam also placed emphasis on buying into value added packaging businesses rather than focusing on commodity/bulk products. Today, its emphasis is on a range of best lines (products) and on driving up competitive advantage in these lines. Rexam has six manufacturing sectors operating in four market segments:
- beauty packaging eg pump mechanisms, and lipstick cases for cosmetic companies
- healthcare packaging eg sterile wrapping for medical goods
- beverage packaging eg beverage cans, glass and plastic containers for the beer and soft drinks industry
- food packaging eg plastic containers for spreads, ice-creams and yoghurts; glass jars.
Global packaging market
Rexam is particularly well placed in the global packaging market because of its unique product range. There are clear synergy benefits from operating in these major market segments. Marketing to a number of key customers who will want to purchase all of these types of packaging is a typical example of this synergy.
The majority of Rexam’s product sales are made to a relatively small number of global clients. Just under 50% of all sales are accounted for by approximately 10 major customers, including: Allegiance, Avon, Carlsberg, Chanel, Coca-Cola, Heineken, L'Oreal, Pepsi, Procter & Gamble, Red Bull and Unilever. Rexam aims to provide an added value service to its customers, serving them as they develop and innovate. Rexam’s customers are becoming bigger and more global. So too is Rexam. As a supplier, Rexam must support its customers in their new markets. It is easier for customers to build on an existing relationship with a tried and trusted supplier than to start afresh each time.