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.