2010 Top 25 Converters - Pieces of the Packaging Puzzle
British comedian and entertainer Henny Youngman once told a story of a doctor who has a stethoscope to a patient’s chest. The patient asks, “Doc, how do I stand?” To which the doctor replied, “That’s what puzzles me!”
Considering the blows the recession dealt in the first half of 2009 and the economic destruction it left to clean up through the remainder of the year, the doctor in Youngman’s story might be stymied about the well-being of some businesses, including flexible packaging converters. Raw materials prices again wreaked havoc with company ledgers, as did coping with reduced revenues while maintaining a focus on remaining competitive.
Yet again, the industry asks Flexible Packaging magazine, “How do today’s converters stand?” and we respond. Our annual Top 25 Converters listing, now in its sixth year, examines the larger flexible packaging picture and looks at the piece of that puzzle that each of the top 25 converters hold as measured by revenues for the entire year prior. According to the Flexible Packaging Association, $26.4 billion of flexible packaging was sold in the U.S. in 2009, a modest growth of 1.9% from 2008. Measured by dollars, the companies in our Top 25 Converters list account for about three quarters of the total U.S. industry.
Of course, total revenues for one year tell only a portion of what happened last year or the current state of the industry. For instance, companies like Pliant Corp. or Alcan Packaging-who were both heavy hitters in last year’s list-are conspicuously absent this year. Pliant Corp. was acquired by Berry Plastics as the former company ascended from bankruptcy in December of last year. Alcan (with the exception of the Medical Flexibles division) was officially split between Bemis and Amcor in first quarter 2010; only in June did the U.S. Department of Justice approve Amcor’s purchase of Alcan’s medical unit. The full effect these acquisitions will become evident in next year’s list once those newly acquired plants have generated a full year’s worth of revenue for their new owners.
Comparative data, last year to this year, provides an additional perspective on this year’s list. Of the 20 companies that appear on this year's and last year’s list, 13 saw a decrease in revenue, five saw an increase and two saw no change. Of these same 20 companies, 12 companies operate as many plants this year as they did the previous year, five expanded their number of facilities, and only three now operate fewer manufacturing plants this year. Lastly, of these 20, eight employed the same number of people in their flexible packaging operations, six cut the number of employees and six hired additional employees.
To flesh out our Top 25 Converters listing, we’ve identified recent developments at each of these leading flexible packaging companies to give you as complete a competitive picture as possible.
We employed the same methodology as last year to identify the Top 25 Converters of flexible packaging.
First, we updated our list of companies to include new companies in the market, account for any ownership changes in the last year, and take in other converters that may have been inadvertently left off previous lists. Second, we researched the data for this year’s rankings using several resources, including financial reports such as 10Ks with the Securities and Exchange Commission (SEC), information from the Hoover’s Online and Gale Online databases, annual reports and company websites.
Finally, we asked each company to verify, correct or supply information if it was missing.
Rankings are based on sales for fiscal year 2009-but reflect revenue for flexible packaging only. Sales of film products for uses other than packaging are not included in our figures.
1 - Sealed Air Corp. garners top spot, industry awards
Yet again, the Elmwood Park, N.J.-based converter has topped our annual rankings with more than $3 billion in annual sales. Also for another year in a row, Sealed Air Corp. brought home top honors in the Flexible Packaging Association’s annual Flexible Packaging Awards program, this time with its innovative Marinade On-Demand Package produced by the company’s Cryovac Food Packaging unit.
Elsewhere, the company won awards for two flexible packaging entries in DuPont’s 22nd annual Awards for Packaging Innovation. The winning entries to the DuPont contest included the Cryovac line of Grip & Tear vacuum shrink bags featuring easy-open features and Cryovac's Mirabella case-ready packaging with a patented tray lidding system for keeping meats fresh.
2 - Bemis completes Alcan Packaging Food Americas acquisition
On March 1, Bemis announced it had finally completed its acquisition of the Food Americas operations of Alcan Packaging from mining conglomerate Rio Tinto. The $1.2 billion deal added 23 flexible packaging plants to Bemis' international network, which generated some $1.4 billion in sales in 2009. The company ultimately believes this key addition will drive the percentage of net sales in the food packaging space to nearly 70% of total net sales.
While the Alcan purchase will no doubt foster the kind of growth that could put Bemis in the number one slot on next year’s Top 25 Converters list, it has maintained its focus on core values, including its sustainability and environmental initiatives. To this end, Bemis ranked 373rd in Newsweek's Green Rankings, a list of the 500 greenest big companies in America based on environmental performance, policies and reputation.
3 - Sigma Plastics Group makes acquisition, leverages partnerships
In January, Sigma Plastics Group rang in the New Year by announcing the addition of a new member company, McNeely Plastic Products. The Clinton, Miss.-based converter’s capabilities include 1- and 3-layer coextrusions, barrier films, plain and printed rollstock, industrial liners, wicketed bags and recloseable bags.
“McNeely Plastics is a well-established, reputable company that compliments our industrial film expansion strategy,” Sigma Group chairman and chief executive officer Alfred Teo said of the acquisition. “We are committed to providing the capital and support necessary to allow McNeely to reach its full growth potential.”
Meanwhile, Sigma used 2009 to continue development of its partnership with Gray Court, S.C.-based ISO Poly Films. Since partering with Sigma, ISO Poly Films has installed several new film lines, including a 5-layer line, 3-layer line, and a 7-layer barrier line.
4 - Printpack expands global footprint
In August 2009, Printpack put the finishing touches on a $40 million, 107,000-square foot production plant in Kutno, Poland. Replete with new rotogravure and flexographic printing presses and the latest lamination technology, the Polish plant joins a recently completed facility in China, further strengthening the company's global packaging muscle while allowing the company to serve new markets, including pouches for pet foods and dry products, condiments and sauces.
On the domestic front, Printpack picked up two 2009-2010 Packaging and Label Gravure Association (PLGA) Global awards and two Honorable Mentions in that industry group's annual packaging awards program. Further, Printpack’s innovative Preserve Toothbrush Pouch took home a Silver Award for Packaging Excellence in FPA’s Flexible Packaging Awards program. The innovative packaging structure distinguishes itself from the competition by virtue of its unusual package design and its “second life” as a postage paid return mailer.
5 - Berry Plastics Corp. picks up Pliant
In December, Berry Plastics Corp. completed its acquisition of 100% of the common stock of Pliant Corp., at precisely the time Pliant emerged from Chapter 11 bankruptcy on Dec. 3. With the acquisition, the former Pliant business began operating as Berry's Specialty Films Division under former Pliant chief operating officer R. David Corey, whereas Berry's existing Flexible Films Division became Berry's Film Products Division.
Under its new identity, Berry Plastics made quite the splash in 2010's FPA Flexible Packaging Awards, garnering two Gold Awards for Technical Innovation and Environmental & Sustainability Achievement with its Fresenius Dialyzer package forming web and Stratos Hand Wrap film, respectively.
6 - AEP Industries accelerates after Atlantis deal
After concluding its nearly $100 million acquisition of Atlantis Plastics in 2008, AEP Industries Inc. now has 11 North American plants at its disposal. With the deal, Atlantis’ Linear Stretch films business became part of AEP’s Stretch film operations, while Atlantis’ Custom Films division was merged into AEP’s Proformance Films operations focusing on high-performance mono and coextruded products. Such realignment may have worked: In its second quarter 2010 report, AEP Industries noted that in spite of the severe deterioration of its construction- and housing-related markets, it has successfully increased volume 1.9% over prior-year levels.
7 - Exopack adds plants, strikes FPA Gold
In June, Exopack announced it would pick up Bemis' Menasha, Wis., and Catoosa, Okla., plants for approximately $81 million. Under the terms of a U.S. District Court order, Bemis was required to divest the Menasha and Catoosa facilities, which were included in the Bemis acquisition of Alcan Packaging Food Americas. The two facilities focus on the production of plastic packaging for retail natural cheese and shrink bags for fresh red meat.
Also in 2010, Exopack won an FPA Gold Award for Environmental & Sustainability Achievement award for its PFOA-free Microwave Popcorn bag. Exopack’s PFOA-Free popcorn bag utilizes FDA-approved grease resistant coatings manufactured in a process that does not introduce C8 chains, a man-made chemical that has attracted EPA attention for long-term exposure risks.
8 - Graphic Packaging holds its own
Graphic Packaging reported that the company’s income from its Specialty Packaging division, which includes flexible packaging and labeling, decreased by $11.0 million in 2009 as a result of the lower volume and pricing. In addition, in the fourth quarter of 2009, Graphic Packaging recorded an $11.5 million impairment charge relating to its flexible packaging facility in Ontario, Canada. However, the company was able to offest these decreases with lower raw material costs and the volume increase from the $1.75 billion Altivity transaction in 2007.
9 - Hilex Poly steps up recycling effort
In January, Hilex Poly cut the ribbon its newly expanded plastic bag recycling facility in North Vernon, Ind., allowing the company to double its efforts to recover and ultimately recycle plastic bags. The additional capacity will enable Hilex Poly to recover more than 20 million pounds at the center in 2010. The recycling facility plays a key role in Hilex Poly's internal initiative to put as much as 25% recycled content in its commodity bags, and may play a big part in aiding the larger North American bag industry’s goal of including 40% recycled content in these bags by 2015.
10 - Packaging Dynamics sees Moody's downgrade
Last summer, Moody’s Investor Service confirmed all the credit ratings of Packaging Dynamics and its negative outlook. Despite Packaging Dynamics’ B2 corporate family rating that is supported by the food packaging's relatively consistent performance, demand for industrial and other sensitive products remained weak last year. Moody’s downgraded the corporation from B1 to B2 in May 2008, citing a shortfall in 2007 results. Packaging Dynamics operates three business units, including BagcraftPapercon, International Converter and Thilmany Papers.
11 - Bryce Corp. beefs up printing capabilities
Bryce Corp. generated a lot of industry and consumer attention in late 2009 and 2010 for its role in producing Frito-Lay's 10.5-ounce Sun Chips bags, which use poly lactic acid (PLA) as part of a 100% compostable structure. However, the company is also attracting consumer attention-and CPG business to match-through its expanded 7-Color Extended Color Gamut (ECG) printing. The flexographic technology combines the four process colors (cyan, magenta, yellow and black) with a palette of RGB colors (red, green and blue) to create more than 1,400 specially matched colors. Keeping with the printing process improvements, the company has expanded its Searcy, Ark., plant to handle additional business stemming from its recently unveiled matte/gloss printing capabilities.
12 - Winpak grabs IoPP AmeriStar award
Winpak combined the best of its rigid and flexible packaging abilities to come up with a reclosable sliced cheese package that ultimately won the Institute of Packaging Professionals' AmeriStar award. The three-component package consists of a high-barrier rigid thermoformed tray manufactured in South Chicago Heights, Ill., and a nonforming peelable lidding film manufactured at its Winnipeg, Man., Canada, plant.
13 - Sonoco sails through shaky times
In the early stages of the economic storm, Sonoco shifted more of its focus and resources toward consumer markets, which it perceived to be less sensitive to economic downturns. While this effort to create a sales mix that's 60% consumer-oriented and 40% industrial by 2012 is not yet complete, it is seeing early signs of success. Sonoco reports solid improvements in flexible packaging operating profits in 2009, driven by high-impact graphics and high-performance laminations being complemented by a full line of technology innovations and consumer convenience features.
14 - Toray adds key execs
In 2009, Toray Plastics America appointed several execs to key leadership roles within the company. Early in the year, Richard Schloesser was named chief executive officer-the first American to achieve the highest-ranking position within Toray-succeeding Kojiro Maeda, who is returned to Toray Industries in Japan to assume the role of deputy general manager of the Films Division.
Michael Brandmeier was promoted to senior vice president at Toray Plastics America and was also named to the company's Board of Directors. Brandmeier joined the company in 1995 as sales and marketing manager of the Torayfan Division and has served as director, senior director and vice president of sales and marketing there.
15 - Ampac leads by innovation
Ampac Flexibles recently captured a Silver Award for Environmental & Sustainability Achievement in FPA's Flexible Packaging Awards for a reusable flexible water bottle structure. Designed to fit in a pocket, purse, backpack or briefcase, the water bottle can be rolled or flattened, and tucked away when depleted. The converter also recently unveiled a barrier tube film for a variety of sample or one-time uses in the healthcare, personal product and consumer applications. Produced at the company's Performance Film facility in Cincinnati, Ohio, the custom-blended 7- or 9-layer coextruded structure provides excellent oxygen transmission rates (OTR) and can be surface treated for printing or lamination. The sealant technology does not require radio frequency (RF) sealing, but has been designed with a broad seal range providing exceptional seal strength and durability for tube applications.
15 - Duro Bag Manufacturing Co. unveils bread bag
In June, Duro Bag announced a full-front window panel bag developed specifically to enhance the shelf appeal of artisan bread and bakery items. The full-front window panel bags feature a clear poly window that can span the full width plus half of the gusset on both sides of the bag, which provides a clear view of the item it contains. The innovative bag comes in perforated or non-perforated Kraft, white and a patented Freshness Paper, two layers of paper that are breathable for a regulated air exchange ensuring that the bakery item stays fresh until the final slice.
17 - Amcor lands Alcan medical business
Amcor received U.S. Department of Justice approval in mid-June to buy Alcan Packaging's medical flexibles business. As a condition of approval, Amcor, which completed a transaction for a significant part of Alcan's packaging business in February 2010, will be required to divest a North Carolina plant in order to seal the deal on Alcan's medical flexibles business. Earlier, Amcor had initially bid on a more sizable portion of Alcan Packaging but reworked the transaction to exclude Alcan Packaging’s medical flexibles operations.
18 - AET closes small tubular lines
AET Films opted to close the small tubular production lines at its Terre Haute, Ind., plant late in 2009, opting instead to continue producing tubular film on its two larger tubular lines. Reasons behind the decision included the highly competitive nature of the oriented polypropylene (OPP) film business, as well as product performance, product uniqueness, customer relationships, service to customers, purchasing power, and manufacturing costs. Increased competition from low-cost producers with new highly efficient assets and the present economical downturn has impacted sales output, says AET Films.
19 - American Packaging expands facilities
Early in 2010, American Packaging Corp.'s Board of Directors approved a $16.5 million expansion project at the company's Flexographic Printing and Laminating Division in Story City, Iowa; the additions are slated to wrap up this summer. Regular investments are at the heart of the company's success: Over the last several years, the company has invested $12 million at its Rochester, N.Y., extrusion, laminating and coating plant and has completed a $13 million addition to its printing and laminating division in Columbus, Wis. Over the last decade, the privately held converter has invested more than $150 million in capital equipment and improvements.
20 - Hood Packaging unveils 'Total Package'
At Pack Expo 2009 in Las Vegas, Hood Packaging introduced "The Total Package," a laminated flexible structure aimed specifically at ousting rigid plastic pails from the pet food, lawn and garden, and detergent markets. Available in up to 10-color printing, matte or glossy finish, the bag can handle any weight between 10 and 50 pounds thanks to a patent-pending handle system that makes the product much easier to carry and dispense, all while maintaining key brand identification on the shelf and beyond.
21 - CEI adds converting plant
Coating Excellence Int'l (CEI) opened an additional manufacturing plant in Hebron, Ky., in early 2010, adding some 100 jobs to the local economy over the next three years and increasing the converter's production area by 120,000 square feet. The Hebron plant plays a key role in producing the company's line of SuperTube pinch-bottom, poly-woven bags used in the pet food and animal feed industry. In addition to the opening of its newest facility, CEI was also recently recognized as a “Sustainable Green Printer” by the Sustainable Green Printing Partnership, making the company one of only 18 printers in the world to receive the certification.
22 - Pregis Corp. acquires IntelliPack
In February, Pregis Corp. acquired IntelliPack, a foam-in-place packaging supplier. According to the company, the acquisition of Tulsa, Okla.-based IntelliPack will allow Pregis to expand its offering of protective packaging solutions. As such, IntelliPack became part of Pregis' protective pacakging division, headquartered in Deerfield, Ill.
23 - Scholle Packaging wins two Ameristar Awards
Scholle Packaging, long considered a pioneer in the bag-in-box segment, won two Institute of Packaging Professionals (IOPP) Ameristar Awards in May. One award-winner, KeyKeg, uses a Scholle-produced inner bag and is ideal for beer and other carbonated beverages by offering extra protection during transportation, longer preservation, increased marketing opportunities and clear logistical cost reductions. The other winning entry, the Jerribox for liquid laundry detergents, saves approximately 62% plastic usage when compared to plastic bottles that are typically associated with detergents. The Jerrybox's delivery system is composed of a Scholle Packaging inner plastic bag, plastic collar and a push-button dispensing tap.
24 - Appleton sheds C&H Packaging
In December 2009, Appleton Performance Packaging–Films completed the sale of C&H Packaging to InterFlex Group, Inc. based in Wilkesboro, N.C. Based in Merrill, Wis., C&H Packaging prints and converts flexible plastic packaging in the food processing, household and industrial products industries and was acquired by Appleton in April 2003. Upon concluding the sale, Appleton said it intended to focus its performance packaging operations on film production at its Rhinelander and Milton, Wis., and Turners Falls, Mass., extrusion plants.
25 - Nordenia sale talks linger
Packaging Strategies, a sister publication to Flexible Packaging, reported in February that Nordenia USA parent firm Nordenia Int'l. may be the center of one of the next major acquisitions in the months ahead. More recently, sources familiar with Oaktree Capital Management's attempt to divest Nordenia suggested the private equity firm may have withdrawn its offer and it is unclear if Oaktree will ultimately pursue the deal.