Memsan Case Study

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SBU: Juergen Scherer (SBU Europe Head), Frank Schillinger (SBU Europe Operations)

Local management: Ali ?zbudak (Plant Manager)

Key messages

Product

The plant manufactures a wide range of open head and tight head metal drums from 20L to 218L, including cylindrical and conical large or small drums, with or without interior coatings. This is the only plant in the Mauser Group producing conical large drums, a product mainly used in the food industry (particularly in fruit and vegetable harvests).

Market

Three large players (Mauser, with market share of c.45%, as well as Greif and Izvar) comprise the majority of a market of c.2.3m drums per annum (split into large cylindrical, large conical, and small drums) to end markets in specialty
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Kocaeli, on east border of Istanbul and close to both the highway and the harbours of the Marmara region.

Originally part of the Memsan steel drum business, the plant was founded in 1974 by local shareholders, and subsequently signed a Know-
How agreement with Mauser in 1989 to further its product knowledge and develop its portfolio.

Memsan became the MemsanMAUSER joint-venture in 1994, when Mauser purchased 10% of the company. In 2007, Mauser purchased the remainder of the JV to become the sole owner.

The plant has a high degree of management experience, with several key members of staff having been with the company for almost 20 years. The total site area comprises 15,000 m? (of which the building area is 9.000 m?), and is leased from the landowner (the former shareholders of Memsan) for an annual cost of c.?600k per annum until 2018 (with inflationary increases from 2016 onwards and options to extend the lease if necessary).

The site is shared with the newly opened Plastics plant, however currently rent is incurred solely in the Metal plant financials. Approximately
[ ]% of the site is occupied by metal compared to [ ]% plastic.

Production
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The plant is Quality Lab certified by BAM/Germany, and holds standards TS EN ISO 9001:2008 (TSE - Turkish Standards Institute), TUV ISO
9001: 2008, TUV ISO 14001:2004, as wells as various product approvals by TSE and BAM.

Products

Cylindrical drum line (216.5Lt open-top and tight-head) ? 50% of total sales volumes, CM1 margin c.40-45%

Conical drum line (170Lt, 194Lt, 218Lt) ? 25-30% of total sales volumes, low margin, CM1 margin c.25-30%

Cylindrical small drum line (20Lt, 30Lt, 60Lt open-top and tight-head) ? 10-15% of total sales volumes, CM1 margin c.50-60%

Conical small drum line (20Lt, 30Lt, 40Lt, 60Lt) ? 10-15% of total sales volumes, CM1 margin c.50%

Summary of plant equipment

Production line /

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