US manufacturer enlarges outsourcing deal

23 December 2009

24 December 2009 | Jake Kanter

Industrial packaging producer Greif has extended and expanded its procurement outsourcing arrangement with ICG Commerce.

ICG has carried out the procurement of non-core spend – including logistics and capital equipment – on behalf of Greif since 2004. This arrangement chiefly covered North America. Now the five-year renewed deal will also cover Greif’s operations in Latin America, Europe and Asia.

Both companies declined to reveal the value of the contract or spend under management.

Ron Brown, senior vice president of global sourcing and supply chain for Greif, said in a statement: “Procurement outsourcing continues to play a pivotal role in supporting Greif’s growth and allowing us to remain agile in the changing economic landscape.”

Earlier this year the Everest Research Institute found that US manufacturing firms have a strong appetite for procurement outsourcing. The industry accounted for nearly 60 per cent of total PO contracts signed in 2008. This was up 22 per cent compared with 2007 and growth was driven by contract renewals, Everest said.

A later report by researchers Ovum said it expected growth in procurement outsourcing to be slow in the coming years despite “excessive hype” and optimism.

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