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By Mike Taggart, CFA | 11-06-2009 02:10 AM

The Moat in Your Medicine Cabinet

Aptar COO Steve Hagge on how the firm's close client relationships and FDA-approved dispensers give the firm an advantage in consumer packaging.

Securities mentioned in this video
ATR AptarGroup, Inc.
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Mike Taggart: Hi, I'm Mike Taggart, senior equity analyst at Morningstar. As part of my responsibilities for covering the consumer packaging goods industry, I get to cover a company named Aptar. Aptar makes dispensers of all types. You almost definitely have its products in your house.

With me today to discuss Aptar in a little more depth is Steve Hagge, the chief operating officer of Aptar. Steve, thanks for joining me today.

Stephen Hagge: Thanks, good morning.

Taggart: In the consumer packaging goods industry, one of the bases of the competitive advantage is scale, manufacturing scale, but for Aptar it seems to be also intellectual property. How does design, innovation, that sort of thing, client relationships, how does that all fit together to create a narrow economic moat for you?

Hagge: You're right, Mike. Scale is important. If you take a look at what we do, our core manufacturing technologies include high-speed assembly. So we're putting together literally thousands of products within minutes. So that's a key.

Taggart: Every minute. In one minute, you put a thousand pieces together.

Hagge: We're putting together anywhere, a componentry of anywhere from eight to 15 components, we're putting those together upwards of speeds of 500 to 1,000 per minute. So scale is important, but it's also probably even more important in terms of where the technology goes.

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