Packaging & Paper Companies & Raising Capital

By Andreas Sillaste

Marketing Specialist, Investments

How are Packing & Paper Companies Raising Capital

Companies in the packaging and paper sector use private equity to raise capital in several ways. One way significant value has been added through acquisition of companies, and then selling them off for a profit. Also, parts of packaging and paper companies are being sold to private investors through private placements and regulation D SEC fundraising. By private placements, companies gain capital, and an increase in support from investors, and through regulation D SEC fundraising, they do not have to disclose their fundraising efforts to the SEC. A way to raise capital without investors, is to get donations from people who believe in the packaging and paper company, but do not expect royalties or stock in the company in return. Certain strategic investors who are interested in expanding to packaging and paper, invest in packaging and paper to gain insight while the companies raise capital through the investors. Institutional investors, however, might invest in packaging and paper companies to increase returns for other people, which also raises capital for packaging and paper companies as their stock is being sold.

How are Packing & Paper Companies followin ESG policies?

Companies in the packing and paper industry must meet certain mandates that adhere to Environmental Social Governance to produce in a more sustainable, socially aware way. Companies use renewable materials and recycled products to produce their products, such as recycled plastic, wood pulp, cardboard, and more. They also minimize the number of materials needed and keep packaging designs as minimal as possible. Machinery used in the production of packaging and paper is more efficient in the ESG aware companies as they try to emit less for the same number of products produced. Machinery that is more energy efficient uses newer technology that is faster, more efficient, and less of it originates from fossil fuels, so the use of electric machinery is abundant. A concern that packaging companies face is the litter produced from their products which can be approached with incentives to return packages such as monetary, or credit incentives. 

ESG investment opportunities in the investment industry.

Smurfit Westrock is a company that describes themselves as a leader of sustainable packaging. Their strategy to focus on ESG, is to use recyclable, renewable, and recycled materials in their packaging production process. They offer packaging conversion operations where they take used packaging and convert it into new, usable products. By converting packages, they create circularity in the packaging sector, and it reduces the amount needed to produce entirely new products. From the paper manufacturers, Stora Enso uses clean energy supply in their most energy intensive processes which are pulp and paper production. Their energy supply comes from renewable sources such as hydropower, wind energy, and solar energy. Stora Enso is also known for sustainable farming practices. They protect and promote habitats for the species in the areas they farm trees in, restore environments that have been weakened due to climate change, and protect waters in the surrounding areas where they operate.