The Situation
BoxMax* leads the market, but industry-wide high fixed costs and low prices left it lagging in the red.
- Two packaging companies merged to form BoxMax, an $8 billion powerhouse.
- BoxMax became the clear industry leader in its packaging segment. Unfortunately, the market is a capital-intensive, high fixed-cost business suffering from excess capacity and low prices.
- As a result, BoxMax was posting poor financial returns: it was projected to be $7 billion in debt on negative cash flow of $400 million. BoxMax was Bain to advise on how BoxMax could turn industry leadership into profits.
Our Approach
Bain used external and internal benchmarks to identify key performance gaps.
![](/contentassets/a3ae5c7020c94087b8d0de627b0cde20/id_399_2.gif)
Our Recommendations
To compensate for the industry's inherent weaknesses, Bain recommended aggressively reducing costs and improving processes.
![](/contentassets/a3ae5c7020c94087b8d0de627b0cde20/id_399_3.gif)
The Results
With Bain's support, FoodCo implemented the recommended initiatives, generating 15% cost savings and increased flexibility. The company also worked with Bain to put knowledge transfer programs in place so that the improvements would spread to additional plants in the system.
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* We take our clients' confidentiality seriously. While we've changed their names, the results are real.