Morningstar | BlueScope’s Dayal Tapped To Lead Turnaround of Narrow-Moat Pact Group; Shares Remain Attractive
We’re optimistic about the appointment of Sanjay Dayal as CEO of narrow-moat Pact Group. When Pact’s Chairman indicated they were looking for a CEO with strong operational capabilities, we’d taken this to mean an appointment from within the plastics industry was imminent. However, Dayal currently serves as chief executive of BlueScope Steel’s offshore building products businesses in Asia-Pacific and North America. He has a background in the chemicals industry previous to BlueScope. Nonetheless, we believe Pact is set to benefit from Dayal’s strong technical credentials, expertise in both corporate and innovation strategy and experience in business turnaround. Importantly, his technical grounding should see him well equipped to lead the vital rationalisation of the Australasian manufacturing footprint which offers a path to margin recovery. News of the appointment has been positively received by the market. We continue to see significant value in Pact shares which trade with margin of safety at a 33% discount to our unchanged view of AUD 4.20 per share.Pact Group Holdings is provider of specialty packaging and manufacturing solutions in Australasia. Co. converts plastic resin and steel into rigid packaging and other products that service customers in different sectors including: food and beverage, personal care, household consumer, industrial and chemical, and materials handling and infrastructure. Co. also provides a range of services including outsourced manufacturing, filling and packing and a range of sustainability, recycling and environmental services to assist customers in reducing the environmental impact of their product packaging and related processes.
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