GLG delivered insights needed to make an investment decision in a highly challenging trading environment.
Project scope
Challenge
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 Klšckner Pentaplast.
Klšckner 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 most of the company's products, cut into Klšckner's net revenue.
The GLG Approach
The GLG team connected our client with three leading industry experts with an understanding of Klšckner 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 the latest performance analysis and outlook on Klšckner 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.
Outcome
With insights based on first-hand expertise, the client formed a holistic perspective on the industry and company outlook in the context of increased energy costs and expensive manufacturing materials. GLG's unique combination of research methodologies helped the client confidently make an investment decision.
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