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How CCL Industries Quietly Became the World’s Largest Label-Maker

What is the secret of CCL's success?
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When it comes to CCL’s success, Stephen MacLeod, an analyst with BMO Capital Markets, points to a series of factors. “You have to take into account the company’s competitive position in the global label-making market, and its strong customer relations, [and] diverse user market,” he says. CCL’s operations span six continents and include 119 facilities, in large part the result of a series of smart acquisitions. The company’s strategy is to make small, tuck-in purchases that provide “exposure to a unique technology or a unique customer set,” notes MacLeod. But CCL has also picked up companies that operate somewhat outside its traditional line of business.

Resettable cold chain label for vaccines, biologics, and other injectables

If asked to name a booming industry, label making might not be the first that comes to mind. Yet CCL Industries Inc. (TSX: CCL), a Toronto-area manufacturer that bills itself as “the largest label company in the world,” has been quietly growing for years—at an incredible rate.

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Comprising three segments (CCL Label, CCL Container and its new consumer office products arm, Avery), CCL initially manufactured labels and packaging for products in the home and personal-care industry, but it has grown into a major supplier for the pharmaceutical, medical and chemical sectors. That’s hardly the only change, explains CEO Geoffrey Martin. “We’ve gone from being a small-cap stock in Canada to a decent-sized one. We’ve grown from a billion and change in revenue to $4 billion and change in revenue. We’ve gone from being a North American company to a global one,” he says.

It’s hard to overstate CCL’s growth: In the first quarter of 2016 alone, revenue grew by 22.9% year-over-year to reach $866.8 million, while net income jumped 31%. Over the past five of years, CCL’s share price has shot up nearly 600%. The company excels at consolidation and plans to continue expanding its already sprawling network. What’s more, it isn’t satisfied to dominate the label and container market alone.

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