Within the SDG Engagement Equity capability, both attractive investment fundamentals and the potential for a constructive engagement programme are equal pre-requisites for investment. This is well-illustrated through our exposure to Huhtamaki, a Finnish consumer packaging company.
From an investment perspective, Huhtamaki operates in areas where it believes it has leadership or leadership potential. In the consumer packaging industry, there are decent barriers to entry, some of which include manufacturing and distribution footprint, manufacturing knowhow and product innovation and quality. Although many of its products are not technologically complex to make, Huhtamaki has strong pedigree in producing large volumes of products and meeting tough customer demands for quality and service. The company also has a good return profile and a strong management track record.
Meanwhile, our engagement case focuses on opportunities across three pillars: a company’s supply chain, its direct operations, and its products and services. We have been engaging Huhtamaki on:
- The company’s sourcing of fiber (supply chain)
- The provision of decent work and resource efficient operations (direct operations)
- Investments in innovations which are more environmentally friendly both in terms of material usage and end-use recyclability (products)
Responding to the coronavirus
In response to the global coronavirus pandemic, Huhtamaki has suspended its dividend. In addition, as a result of coronavirus-related demand reduction, it repurposed one of its factories in Northern Ireland, giving it capacity to produce 4m face shields per week for the UK’s National Health Service (NHS) – and it has since replicated this activity across other sites to reach 10m units per week.