Opportunities for Samson & Son

AS Australia's oldest family company, Lionel Samson & Son has successfully weathered many economic storms.

Entering its 180th year in business, its leadership acknowledges that the current environment is as tough as ever, and may well get worse, but it's also clear that the business is in a good position to survive.

Lionel Samson managing director Dick Erskine, who is responsible for the group's packaging, wine and liquor wholesaling businesses, said the company had moved quickly to batten down the hatches after the surprising change in economic conditions.

"I have never seen such a catastrophic sell down," Mr Erskine said.

"I have seen six or seven of these but have never seen anything so fast.

The Storsack Paccom division, which provides industrial woven polypropylene bulk bags, has really noticed the impact, particularly in mining.

"We are 70 per cent of the mining sector and those customers are clearly slowing down," Mr Erskine said.

"It is the classic domino effect."

He said the downturn had coincided with the falling Australian dollar, which made imported products much more expensive, even though the cost of oil, an input, had also fallen.

Despite this, several opportunities had arisen for Lionel Samson in the industrial packaging sector as a result of the crisis. Firstly, the offshore producers of the products had changed their attitudes from the previous boom brush-off.

"They are anxious to sell to us," Mr Erskine said.

"The market has changed from 'see you later, maybe' to constant calls."

Lionel Samson had also had calls from owners of businesses in related fields who were now forced sellers due to indebtedness.

"If they have a good business, that is an opportunity to assess those businesses and acquire good assets," Mr Erskine said.

Storsack was looking to diversify, including into the bulk wine business through liners for containers.

"We do see it as an opportunity to grow market share," said Jan Skrapac, Lionel Samson's CFO.

"We have been selective about what we cut and where. We cut what doesn't work and maybe what was just nice to have."

As an example, Mr Skrapac said, the business had cut back on bringing in trade guests from overseas for the time being.

Mr Erskine acknowledged the wine business, where it has upmarket brand Plantagenet, was particularly tough given its reliance on discretionary spending.

In this area, though, much of the competition was in a far worse position and Lionel Samson expected considerable numbers of assets - wineries and vineyards - to be on the market, providing new opportunities for the business.