Exopack Evolves Into a Global Packaging Solution Provider
Servicing the customer is at the top of virtually any list of goals, and near the beginning of almost every mission statement for converters of flexible packaging. But it’s easy to simply proclaim that customer service is a top priority. It’s something entirely different when a company takes unique, significant, even industry-changing steps to make that proclamation a reality. <
That’s exactly what Exopack did in 2007, but much happened with the Spartanburg, S.C.-based packaging supplier that lead to its global customer-service breakthrough.
In the fall of 2005, Sun Capital bought Exopack Holding Corp., including its subsidiary Exopack, and was combined with two other previous Sun acquisitions, Cello-Foil and The Packaging Group. The resulting company was called simply, Exopack, and it served the food, industrial and medical markets by offering extruded flexible films, laminations, pouches, printed and unprinted products, and multi-wall bags. At the time, Exopack boasted sales of about $450 million, and Jack Knott, Chairman and CEO of Cello-Foil, became president and CEO of Exopack.
Knott, then set his sights on two things: integrating the company’s business units into a cohesive packaging manufacturer, and facilitating Exopack’s growth into a global packaging solutions provider.
“Our whole goal, with Sun Capital, was to do a consolidation business model that really works in the flexible packaging market,” says Knott. “Many people have tried, but there have been very few business models that have actually worked.
“Our goal was to create a mid-sized, North American-based converter and be flexible with the type of solution we bring to our customer.
Exopack and its acquired businesses are well-known and have been stable for many years. The company’s sales team has cross-trained, so to speak, to sell multiple products, substrates, etc.
Service With A SmileWith that foundation, Knott turned his focus to customer service, putting a substantial effort into making Exopack much easier to do business with, for the benefit of the customer.
“We spent an enormous amount of capital making sure our manufacturing footprint was correct,” says Knott. “On the fiber-based side, we spent a substantial amount of money on robotics and inlines to make extremely efficient facilities. We’ve added or upgraded many pieces of equipment to add consumer convenience features and high performance packages. On the plastics side, we spent a significant amount of money on new presses, and pushed our plants to be more COEs - Centers of Excellence - in certain technologies. And now on the extrusion side, in addition to our Exopack Perfomance Films acquisition of the Whitby, ON , Canada facility, , we’ll also put the capital into making sure we have the right extrusion technology to support the rest of our business.”
The makeup of Exopack’s business is slightly different than the “average” flexible packaging company, according to Knott. Whereas most companies that have both plastic and fiber-based products have a more unbalanced mix, Exopack’s is closer to 60-40, as the company has a significant presence in multi-wall pet food bags, multi-wall agricultural bags and building materials.
Global Packaging LinxSMFrom a rock solid foundation, Knott had plans to grow beyond the ordinary, and beyond the boundaries of North America. About three years ago Knott and his executive management team looked to expand Exopack’s reach around the globe.
Exopack management developed a concept to partner with a handful of similar companies around the world that offered products and services similar to Exopack’s, and create a network of companies to take advantage of local and regional differences for the benefit of the customer. This was to be Exopack’s global customer-service breakthrough.
Once the concept was in place, Exopack had to find the right companies with whom to associate.
“It took a significant amount of time to find the right partners and qualify them. We had to make sure they had the right equipment and the right. We spent time in their facilities to make sure there was a cultural fit.. It was also important that we qualified them on certain pieces of business,” says Knott. “It was exciting to find companies are very similar to us but in different geographies. Most of these partners do not have experience in the North American market.”
The program, known to the industry as Global Packaging LinxSM (GPL), allows Exopack’s customers in North America to use the company as an interface for their LCCS (Low Cost Country Sourcing) to give them the advantage of certain competitive elements in certain parts of the world. Essentially, that means that these partnerships allow Exopack to pass on regional cost-saving to its North American customers.
“In some cases, buying aluminum foil in the Middle East is more cost effective than buying it here,” says Knott. “We try to source a product that we can make domestically, in the event the service element isn’t working or they need some technical expertise in a service or customer service perspective. Ultimately, the customer enjoys a global supply position because of the cost advantage.”
The advantages can also go the other way, as each partner can benefit from the other’s technology.
“Something that Jack felt that our customers wanted, was something a little more global in breadth, not only looking at raw materials sources off shore and bringing them back into this country, but also finding out how we can service our multi-national customers better from North America,” says Virag Patel, director of global sourcing. “GPL also allows us to take the technologies that they’re using offshore and explore their use in North America. We’re doing that today and have found some things that can benefit our North American customers.
“It’s been a pretty big learning curve, but we’re starting to see the fruits of our labor. Our customers are really responding well to the technology transfer initiatives and also the manufacturing initiatives offshore. It’s been a success story in our company. We’ve been able to assimilate manufacturing operations offshore to North American standards and been able to service our customers with products that they’re getting in North America as well as overseas in a very homogenous manner,” adds Patel.
“What he’s working on is putting up those supply networks all over the world so that we can continue to grow our business rather than face the threat that there will be a dominant supplier in Europe that will align with one of our multi-national customers and take all the business away from us,” says Kearns. “That’s been a key focus of our strategy in setting up these global supply links.”
These established partnerships through GPL effectively provide Exopack the ability to function like a much larger company, serving customers worldwide with a globally-integrated network of facilities.
“Another great thing for our customers is that we’re not limited to technology we have on the floor. We can go out and search for any technology that would benefit our customer base and bring that to them in a very quick, cost-effective manner,” says Lani Craddock, vice president, corporate marketing and business development.
A Unique, Competitive AdvantageExopack’s Global Packaging Linx, which was launched in mid-2007, is a unique approach to the business of flexible packaging, and the company expects to benefit from that both today and in the near future.
“In the industry it’s very unique and something that our customers haven’t seen before, and the fact that we’re embracing global competition in such a way has been refreshing to our customers,” says Bob Arvanites, senior vice president and general manager, paper business.
Craddock points out the competitive advantage it gives Exopack as a point of differentiation. “We’re really developing bridges that our very large competitors aren’t doing because they do have facilities globally, and are trying to sell product out of those facilities and maybe don’t have the initiative to reach out beyond their own brick and mortar,” she says. “We just don’t have that constraint.”
Adds Kearns: “It allows us to compete on a global basis without having to invest in brick-and-mortar facilities. We’re also not limited by what we make ourselves, but can offer our customers other goods and services, globally.”
“We are hearing loud and clear from our customers that this new sourcing strategy is refreshing,” says Scott Ross, senior vice president, sales, plasics. We came in and ensured the quality and service that they’d expect from Exopack. It’s really the evolution of the broker model into a full-service packaging supplier.”
Rebranding ExopackGiven all of the changes over the past few years, Exopack is ready for some rebranding. According to Knott, if a potential customer only knew the company six years ago, “They would probably only know us as a multi-wall bag company. We need to inform the potential customer base about what Exopack is today. Increase the visibility and the knowledge around the question, ‘What is Exopack?’”
Exopack has strengthened its global presence by recently acquiring film coating operations in Matthews, N.C. and Wrexham, North Wales, U.K. This created a new division for the company known as Exopack Advanced Coatings. In addition to providing Exopack with a new technology platform, Exopack Advanced Coatings offers the flexible packaging leader its first wholly-owned and operated facility outside of North America and a sales presence in both Europe and Asia.
“Four years ago, when you said ‘Exopack,’ some people knew us, some people didn’t,” says Knott. “Today, we’ve become a little bit more of a known name. We have some name recognition already, so we’re going in the right direction.”
But to be known, you must be known for something. That begs the question, what is Exopack known for? When asked, Knott didn’t hesitate.
“We will be known as a company that can solve a problem. We can provide a solution to anyone’s packaging issue,” he says. “We are a resource for our customers for anything: sustainability, foreign materials purchase, changes in substrates, etc. I don’t think there is a question in flexible packaging that we cannot answer for our customers. We are a global solution provider.”