With CAPS, Brambles Establishes Automotive and IBC Opportunities

At first blush, the purchase of Michigan-based CAPS by Brambles doesn’t seem like it offers a lot, contributing less than a quarter of one percent to sales, according to my best guess.

But Brambles, while enjoying success internationally in automotive, has seen CHEP struggle to create a place for itself in North American Automotive in the past. CAPS, having built its reputation on automotive since shifting gears from San Francisco to Michigan just about a decade ago, provides that needed toehold, and the opportunity to leverage an increasingly global automotive supply chain.

After decades of wanting to go it alone internally, it is an automotive supply chain that is at now at least moderately receptive to the idea of 3rd party reusable container management. Around 70% of survey respondents would definitely or possibly consider 3rd party management of reusable pallets and top lids, based on the results of the AIAG pallet and lid survey taken in 2010.

Beyond that, CHEP has been looking to grow its IBC business, and this is an area of success for CAPS. Again, a nice fit.

It is these strategic opportunities that make the deal interesting. And as Brambles increasingly becomes a conglomerate of somewhat diverse pooling models, it will be interesting to see how successfully it can manage that portfolio, and walk the fine line between the creation of synergies between units while not tipping and losing those cauldrons of entrepreneurial spirit.

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