Why More and More Printing and Packaging Companies Are Seeking Growth Beyond Their Own Industry

In recent years, the prospects for cross-sector development in the printing industry have become ever broader, and the path of integration between printing and different fields is widening. From publishing to cultural and creative products and even healthcare, the printing industry's reach keeps extending. Among these, many printing enterprises are also jumping out of printing itself and starting to pursue a new diversified development model in which printing grows in parallel with industries outside its own circle.

Hongbo Co. wants to make robot vacuum cleaners

Hongbo Co. was founded in 1999 and listed on the A-share market in 2008; the company attracted much market attention for venturing into internet lotteries. However, the online lottery business has been suspended to this day due to policy factors. In order to find new profit growth points, Hongbo has actively expanded across sectors. Big data, mobile games, IoT technology services and the 5G field are all areas the company once planned to enter.

To this day, this printing enterprise, which holds the title of "the first internet lottery stock," is still pressing ahead on the road of cross-sector transformation.

On April 18, 2021, Hongbo Co. announced that it planned to inject 40 million yuan in cash into Guangzhou Keyu Robot Co., Ltd., taking a 5% stake in Guangzhou Keyu after the capital increase; at the same time, the company planned to sign an equity transfer letter of intent with Guangdong Baole Robot Co., Ltd., a shareholder of Guangzhou Keyu, and its actual controller Mr. Wang Lilei, to acquire 46% of Guangzhou Keyu held by Guangdong Baole. After the transaction is completed, the company will obtain control of Guangzhou Keyu.

If the cooperation is reached, Guangzhou Keyu, once acquired by Hongbo, is expected to accelerate its development with the power of capital, backed by deep technical accumulation and a sound supply chain system. At the same time, Guangzhou Keyu's annual production capacity of one million robot vacuum cleaners, and the packaging of its products, could also create synergies with Hongbo's own packaging and printing business, but so far there has been no further news on the matter.

ORG Packaging expands across sectors into the big health industry

On the evening of May 18, 2021, ORG Packaging announced that it had signed a strategic cooperation agreement with Yunnan Industrial Hemp Industry Investment Co., Ltd., to carry out strategic complementary cooperation around the coordinated development of the medicine-food homologous big health industry within the industrial hemp industry chain.

The announcement showed that Yunnan Industrial Hemp Investment would integrate the plant pharmaceutical industry resources and industrial hemp industry resources of Yunnan Industrial Investment Holding Group Co., Ltd., and, through a "project + park" approach, carry out strategic cooperation and development of the industry value chain in the big health field. Under the agreement, the two sides will develop industrial hemp medicine-food homologous consumer goods, jointly build a laboratory for medicine-food homologous plant health products, and establish promotion mechanisms for industrial hemp medicine-food homologous mass consumer and big health products. The two sides can also jointly create medicine-food homologous big health related products, and ORG Packaging can build related projects in the park according to its own needs.

It is understood that ORG Packaging is mainly engaged in metal packaging production and beverage filling services, and has sound production capacity and certain industry chain supporting resources. It can use comprehensive supporting service capabilities such as product planning, packaging design and manufacturing, food and beverage filling, and informatized and networked marketing services to provide customers with close, high-quality service.

In this cooperation, ORG Packaging organically combines the above core capabilities with Yunnan hemp's resource advantages and industrial platform advantages; the two sides will jointly research and develop a series of functional food and beverage products, cultivate a series of functional food and beverage brands, and carry out related investment activities. But some people questioned that entering this field would involve related risks. For this reason, on May 19, ORG Packaging issued a supplementary announcement stating that the production and sale of the industrial hemp CBD medicine-food homologous products involved in the above agreement has obtained government approval in some overseas countries and regions, and falls within the scope of products that are not licensed in China, so there is uncertainty.

It is worth noting that ORG Packaging is continuously accelerating its layout in new beverage business areas. On May 14, ORG Packaging announced that it would invest 510 million yuan to build a can production project in the Tsingtao Beer industrial park in Xuecheng District, Zaozhuang, Shandong.

Jihong Co. ventures into the baijiu field

Sauce-flavour baijiu occupies a high market position in the baijiu field, and the sauce-flavour liquor from Maotai's core production area is highly collectible because of scarce origin resources, a unique brewing process and a long brewing cycle. Good wine needs no bush, and precisely for this reason printing enterprises have also started to "drink across sectors."

It is reported that after long-term market research and planning, Jihong Co. obtained in early 2021 the exclusive internet operating rights for the "Zunyi Production Area · Good Chinese Sauce Liquor" project and the qualification as a first-tier distributor of the Guizhou brand - Jingyu Shengyan series liquor from the Technology Development Company of Kweichow Moutai Distillery Group, using this as an entry point into the sauce-flavour baijiu field and, in combination with its existing channels, expanding the company's business areas and creating new profit growth points.

To better develop this field, on the evening of June 28, 2021, Jihong Co. announced that it planned to hold the assets of Guizhou Province Renhuai City Maotai Town Gujiao Liquor Co., Ltd. by holding equity in Guizhou Diaotai Gong Liquor Co., Ltd.

But unexpectedly, just over three months later, news came that the acquisition had been terminated. The relevant person in charge said the main reason for termination was changes in the macro market environment, but the company will continue to build its baijiu brand, and the existing baijiu business is not affected. Whether or not the acquisition succeeded, Jihong's move still sought a new idea for the transformation and development of the printing industry.

Cross-sector integrated development is a new trend. Over the years there has been no lack of pioneers among printing enterprises, some successful and some unsuccessful. But for traditional printing enterprises, being able to keep pace with the times in thinking, understand resource integration, and take the first step in cross-sector integration is itself a new beginning!

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378487.html