Kaufman 'Greens Up' Containers

Privately-held Kaufman Containers based in Ohio is one of the leading packaging and container manufacturers in the U.S.  With over a century of experience in producing paper boxes, glass jars and plastic bottles, Kaufman has dipped its corporate toe into bio-plastics.  The company announced in April 2018, a new ‘green’ plastic bottles and tubes produced from sugar cane ethylene sourced from Brazil’s Braskem.  

At the time Kaufman touted the low carbon footprint of its green plastic bottles. The company borrowed Braskem’s sustainability analysis, which claims one hectare of land planted in sugar cane can produce three tons of bio-ethylene and then three tons of biopolymer materials. 

Like its Brazilian supplier, Kaufman brags about the propensity of sugar cane to concentrate and use carbon dioxide (CO2).  While most plants can only muster photosynthesis in the mesophyll, photosynthesis occurs in two types of the sugar cane plant’s tissues, the mesophyll and the bundle sheet of the sugar cane.  As a consequence, under the right irrigation conditions, sugar cane plants can experience enhanced leaf growth when exposed to elevated ambient CO2.

Indeed, University researchers have been looking carefully at sugar cane and two other so-called C4 plants with the dual photosynthesis tissues, maize and sorghum.  However, the work has been in terms of these plants ability to withstand an untimely and rapid increase in ambient CO2 due to unabated greenhouse gas emissions. In an article published ScienceDirect, researchers from the University of Sao Paulo have labeled the Brazil’s claims for low-carbon sugar cane ethanol as “business storytelling.”

Kaufman has not yet made much of its new environmentally responsible products.  Its ‘sugar cane’ bottles and tubes are buried among a selection of other ‘new’ products on the corporate website.  Traveling along the website trail simply leads prospective customers to the company’s original press release announcement.  In defense of the Kaufman sales team there is an icon to click to request a quote.

 What is more Kaufman is not going to be an investor’s entrance to green packaging investment.  The privately company is closely held and appears unlikely to open the doors to new investors.  The company is mostly likely earning a profit on about $75 million in annual revenue.  That said, the company is reported to have borrowed $2.0 million through the Paycheck Protection Program that was made available during the first months of the coronavirus pandemic in 2020.   

Kaufman is known for its ability to step up and provide its customers with custom container solutions.  Its portfolio does include a wide array of unique packaging technologies and solutions from wine bottles, to recyclable seals, to spice jar caps and spice grinders.  Investors can watch to see whether Kaufman’s addition of containers made from bio-HDPE will gain traction with customers seeking an environmentally sustainable solution.

 

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.