2009 Top 25 Converters - Open for Business
Our annual Top 25 Converters report analyzes the flexible packaging business for the entire year prior. According to the Flexible Packaging Association, $25.9 billion of flexible packaging was sold in the U.S. in 2008, a modest growth of 1.5% from 2007. The companies in our Top 25 Converters list account for about three-quarters of total sales in the U.S.
But total revenues for 2008 don’t accurately reflect what happened last year or the current state of the industry. The recession hit hardest in the fourth quarter, so many converters didn’t see a fall-off in sales until late in the year. The economy worsened in early 2009 and is just now showing small signs of an improvement, albeit a slow one.
Comparative data, last year to this year, fills out the landscape. Of the 19 companies that appear on this and last year’s lists, 10 saw an increase in revenue, seven saw a decrease and two held even. Of these same 19 converters, 10 cut the number of employees (some drastically, like by a third or even half), seven hired more and two held even. Lastly, of these 19, nine have fewer manufacturing plants this year, three expanded the number of facilities and seven held even.
Of the plants in operation, too many are idle too often. According to FPA's 2008 State of the Industry report, converters reporting capacity use greater than 80% plunged to 18%, down from 30% in 2007.
Perhaps converters weren’t as busy in 2008, especially at the end, but clearly they were active-or perhaps reactive. Many flexible packaging manufacturers pulled back by cutting people or closing or consolidating plants. But a few expanded aggressively, taking advantage of a bad economy’s affordability.
As part of our Top 25 Converters report, we’ve identified recent developments at these leading flexible packaging manufacturers to give you as complete a competitive picture as possible. Comments welcome! - LMP
We used the same methodology as last year to identify the Top 25 Converters of flexible packaging.
First, we updated our list of companies to add any new ones in our space and to reflect any ownership changes since 2007.
Second, we researched the data for this year’s chart from several sources, including financial reports such as 10Ks with the Securities and Exchange Commission (SEC), information from Hoover’s database, annual reports and company websites.
Third, we asked each company to verify, correct or supply information if it was missing. Every company on the list replied! Some declined to fix our estimates, but all agreed that we could publish the estimated numbers (identified with an asterisk).
Rankings are based on sales for fiscal year 2008-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 researches, reaps rewards
During a time when companies might shy away from research efforts, Sealed Air took the road less traveled-a move that’s sure to make all the difference. In September, Sealed Air opened Packforum Americas in Atlanta, a 28,000-square-foot packaging innovation center. The facility hosts a packaging equipment interaction area for testing myriad package formats.
In October, Sealed Air partnered with Clemson University in the opening of the Flavour Mark Retort Laboratory, a research facility that combines Cryovac brand equipment with a hands-on experience for tomorrow’s packaging professionals.
Sealed Air’s Cryovac brand received four Flexible Packaging Association (FPA) awards in February, including a Highest Achievement Award for its Simple Steps produce package. The new Multi-Seal deli package won a Gold Award for Technical Innovation, Southern Specialties’ use of the Simple Steps package for produce took gold for Packaging Excellence and Darfresh vacuum skin packaging for cheese won a Silver Award for Packaging Excellence. - SK
2 - Bemis gets new CEO
In early 2008, Bemis elected Henry Theisen president and CEO, succeeding Jeffrey Curler. Theisen has been with Bemis for 32 years. He was elected vice president of operations in 2002, executive vice president and chief operating officer in 2003, and president and chief operating officer in 2007. Bemis also hired Scott Ullem as chief financial officer in late 2008. Ullem had worked for Bank of America and, prior to that, spent 14 years at Goldman Sachs. In October, Bemis’ Perfecseal division, which supplies packaging for pharmaceuticals and medical devices, revamped its website to better display its technical capabilities for the global health care market. In May 2009, Bemis was reported to be in talks to buy a portion of Alcan’s packaging unit. - PD
3 - Alcan changes top exec, expands globally
President and chief executive officer Ilene Gordon-the face, heart and brain of Alcan Packaging since 2003-left in May 2009 to lead food ingredient company Corn Products International. She is succeeded by Jean-Christophe Deslarzes, who is based in Alcan Packaging’s Paris, France, headquarters.
Last year, Alcan decided to pump up its international muscle. The company established a new global growth and innovation team in April 2008, led by Michael Rubenstein who previously headed the Global Pharma business. Then in October 2008, Alcan Global Pharmaceutical Packaging division bought the Chakan flexible packaging plant from Associated Capsules Private Ltd. in India. While expanding Alcan’s geographic manufacturing footprint (another goal for 2008-2009), the purchase also reinforces the company’s strategic presence in India’s advancing pharmaceutical market.
Among the material developments in 2008 was SteamRight, an easy-open hermetically sealed bag that allows foods to steam-cook in the microwave. A slightly different steam-venting technology used for the package of Ore Ida Steam N’ Mash potatoes from Heinz Foods North America won a Silver Award for Packaging Excellence in FPA's 2009 Flexible Packaging Achievement Awards. - LMP
4 - Sigma Plastics Group partners with ISO Poly
In February 2009, Sigma announced a strategic partnership with ISO Poly, a custom extruder of specialty plastic films. ISO Poly will have installed additional capacity in 3-layer and 7-layer coextrusion lines in the first and second quarters of 2009. As part of the strategic partnership, Alfred Teo, chairman of Sigma, will serve as ISO Poly Films’ board chairman. In 2008, Sigma acquired a blown film and a cast film line from Davis-Standard LLC to use in the Sigma facility in Tulsa, Okla. Those production lines started up in the first quarter of this year. Sigma also announced an alliance with Mountain Valley Recycling, a national plastic recycling and environmental services company, to offer recycling for stretch film throughout the U.S. and Canada. - PD
5 - Pliant succeeds, standing on the precipice
Pliant has expanded into several growth markets, including the microwavable packaging segment. Further, it introduced Revolution PVC food wraps, helping packagers realize lower packaging costs and film use in fresh meat and produce markets.
In March 2009, Pliant received two FPA awards. FreshView bread bag technology, a Technical Innovation Award winner, uses a solid white, opaque film as a backdrop for graphics and a clear film window to draw the consumer’s attention to the bread within. Pliant’s soft matte packaging for Pampers Swaddlers, using a combination of inks and varnishes, captured a Printing Achievement award.
Despite these successes, the converter has arrived at a vital point after entering voluntary Chapter 11 process of its U.S. and Canadian operations in February. The converter vows it will operate in a business-as-usual manner during the restructuring process. - SK
6 - Printpack Inc. showcases innovation, awards galore
Several new Printpack products from 2008 won industry awards as diverse as the markets the converter serves. Printpack’s “Pantene Cuidado 2 en 1” shampoo sachet pouch won a Flexographic Technical Association Excellence in Flexography award. Targeted at low-income Latin American consumers, the 3-ply structure gives those customers access to high-quality products but in smaller, more affordable quantities.
Printpack also won an Institute of Packaging Professionals Ameristar Award for its “Over the Mountain” (OTM) package. An attractive, cost effective 3-layer alternative to the standard 5-layer lamination, OTM eliminates bag burst from high altitude pressure, while also reducing the amount of raw material used in the package’s construction. - SK
7 - Exopack LLC adds, expands, improves
Exopack’s management team saw key additions in 2008. Tom Vale was named chief operating officer and Gary McDaniel became senior vice president and general manager of the converter’s plastics unit.
Exopack expanded its global reach in April with a joint venture with Lebanese packaging manufacturer INDEVCO to make coextruded polyethylene film in the Middle East. The agreement is part of a longer-term strategy to build multiple production sites in the Middle East.
In March, Exopack announced that more than $25 million had been authorized for new capital projects, including presses, converting lines and technology upgrades. - SK
8 - AEP Industries Inc. buys Atlantis
AEP manufactures more than 800 million pounds of film in nine North American and one European locations. In late 2008, AEP bought the plastic films business of Atlantis Plastics for $99.2 million in cash. In April 2008, AEP sold its Dutch subsidiary, AEP Industries Nederland B.V., to Euro-M Flexible Packaging S.A. and Ghlin S.r.L for approximately $28 million in cash, before closing costs. - PD
9 - Graphic Packaging sells equipment division
Graphic Packaging sold its equipment division in Salt Lake City, Utah, to Canadian company Premier Tech Ltd. in May 2009. In February 2009, Graphic announced plans to close four plants, including a multi-wall bag packaging factory in Cantonment, Fla. In early 2008, Graphic divested two facilities from Altivity Packaging to comply with antitrust regulators’ demands stemming from its 2007 acquisition of Altivity. - PD
10 - Hilex Poly Co. leaves Chapter 11
Hilex emerged from Chapter 11 in July 2008. The company had filed for bankruptcy protection in May, citing the need to reorganize its debt in the face of tight credit markets. A bankruptcy court approved Hilex's debt restructuring plan after it secured new financial backing from the corporate capital arm of General Electric. Hilex announced in September 2008 that it planned to shut down its plastic bag plant in Mount Olive, N.C., citing a reduced demand for plastic grocery bags as more shoppers turn to reusable ones. - PD
11 - Packaging Dynamics takes in Thilmany
Packaging Dynamics merged with a sister company, Thilmany LLC, last summer, about two years after parent Kohlberg & Co., a private equity firm, acquired the company. Thilmany, a producer of paper products, is now one of three Packaging Dynamics business units, along with BagcraftPapercon, which converts paper, film and foil, and International Converter, which produces adhesive and film extrusion laminations. Moody’s Investors Service downgraded Packaging Dynamics from B1 to B2 in May 2008, citing a shortfall in 2007 results. - PD
12 - Bryce Corp. bets on lucky number 7
In 2008, Bryce commercialized its Extended Color Gamut (ECG) printing, also called 7-color process printing. The flexographic technology combines the four CMYK process colors (cyan, magenta, yellow and black) with a palette of RGB colors (red, green and blue) to create more than 1,400 special matched colors. The company also developed a sustainable packaging film made from polylactic acid (PLA), and invested in matte/gloss printing capabilities earlier this year. - LMP
13 - Amcor sells UK facility
Amcor Flexibles sold its Camvac plant in Thetford, UK, to Gil Investments in September 2008. The company explained that Camvac, a supplier of barrier film to converters, was no longer a fit for Amcor, which focuses on end users in selected markets. In April 2008, Amcor announced a plan to relocate its plant in Lodz, Poland, and add two more lines. The new site will be adjacent to the Amcor Reflex plant. - PD
14 - Winpak Ltd. buys Reynolds business
In April 2008, Winpak obtained exclusive rights to use Reynolds Packaging LLC formulations and Drug Master File (DMF) specifications to produce packaging materials used in the pharmaceutical and health care industries. Then in June, Winpak acquired the film packaging business of Walsroder Packaging LLC, a converter of rollstock food packaging. - PD
15 - Sonoco successfully shifts in shaky times
A global manufacturer of products extending beyond flexible, Sonoco has rebalanced toward consumer markets, which, historically, are less sensitive to economic downturns. Sales of consumer products grew to 54% of the company’s total sales, a solid start toward creating a sales mix of approximately 60% consumer and 40% industrial by 2012.
Sonoco has focused on increasing flexible packaging sales in hard-baked goods and confectionery. It extended its Smartseal easy-open and reclosable packaging for cookies to include Nabisco’s Oreos, Newtons and Chips Ahoy! - SK
16 - Ampac gains new products, capabilities
Ampac Flexibles launched several products in 2008, including solventless laminations; a zippered retort pouch; easy-open Linear Tear pouch technology; and two freezer-to-microwave packaging films (a sealant film and a self-venting lamination).
On the machinery side, the company expanded its pouch production with two new systems that increased its range of pouch styles, sizes and output. In November 2008, the company installed a new extrusion line at its Auburn, Wash., plant to increase the output and variety of multilayer films for its food-industry customers, and upgraded an existing extrusion system. - LMP
17-19 - AET develops, redevelops films
In 2008, AET Films began marketing new product lines while expanding or redeveloping others. The company introduced injection in-mold label films and began offering matte finishes on select film products. Also, OPPex, an oriented polypropylene film for use as the inner ply of multilayer packaging, was launched into the meat and cheese market. And AET’s holographic film family was relaunched as OPPtic. The line now includes non-sealable, heat-sealable, straight-wall roll-fed label and low-shrink roll-fed label films. - SK
17-19 - Hood Packaging purchases state-of-the-art press
Hood Packaging purchased a Fischer & Krecke FP 26S-8+1 CI Flexo press from Bobst Group earlier this year. Hood’s new acquisition is equipped with smartGPS, a new, industry-changing technology for setting registration and impression. The new press, capable of 2,000 feet per minute, features a downstream electron beam varnish curing station and can run print widths up to 65 inches. - SK
17-19 - Toray sets up European operation
In early 2008, Toray Plastics (America) Inc. lead the development of Toray Films Europe S.A.S. in Rhône-Alpes, France. The new business will produce Torayfan biaxially oriented polypropylene (BOPP) high-barrier metallized film for the company’s growing European customer base.
Toray also introduced a new thin, high-barrier metallized polyester film. Made in a proprietary process, LumLife MK61 improves metal adhesion, especially for packaging films used in wet and caustic applications. The foil-free lamination maintains high oxygen and moisture barrier, and supports sustainability initiatives. - LMP
20 - American Packaging: lead by innovation
In 2008, American Packaging Corp. (APC) began a major expansion of its extrusion line at the Rochester, N.Y., plant. And it strengthened its relationship with the Rochester Institute of Technology. As part of RIT’s packaging science department, the packaging innovation center moved into the College of Applied Science and Technology’s new Engineering Technology building and reopened on April 18, 2008. At the dedication ceremony, RIT renamed it the American Packaging Center for Packaging Innovation after APC donated $1 million to fund it. - LMP
21 - Coating Excellence makes large strides, shrinks footprint
Coating Excellence International won a 2009 Flexographic Technical Association Best of Show award for its Kaytee Ultimate Finch Food for effective use of illustrations and color in that package. Its innovations in woven bag making also landed another award for Technical Innovation in FTA’s Environmental Excellence competition.
Last August, Coating Excellence signed an agreement with Wisconsin Public Service to purchase renewable, carbon-free energy through WPS’ NatureWise program, becoming one of the largest industrial users enrolled in the renewable energy initiative. - SK
22 - Shields Bag and Printing converts into a custom shop
Founded in 1935, Yakima, Wash.-based Shields Bag and Printing Co. has grown from a simple print shop into a custom blown extruder, printer and converter with sales around the world. - PD
23 - SKC protects profits
Citing cost pressures in raw materials, transportation and energy, film extruder SKC announced a price increase in March 2008 for its polyester and polyethylene naphthalate (PEN) films used in the food and beverage packaging and label markets. Staying profitable is crucial to its future plans to expand its U.S. plant from three to 10 lines. - LMP
24 - Appleton continues investing
In fourth quarter 2008, Appleton Performance Packaging completed installation and start-up of a 9-layer Brampton Engineering coextrusion line at its Rhinelander, Wis., plant, marking the company’s third extruder addition in four years. The new extruder complements Appleton’s existing 5-, 7-, and 8-layer barrier film lines and enables the company to accelerate its development of complex barrier films for the food, medical and industrial markets. - SK
25 - Fortune Plastics Inc.
Fortune Plastics recently purchased new roll winding and die rotating equipment for producing super-flat folded and gusseted film from 7 to 30 inches wide in diameters up to 36 inches. It also developed an ink curing process to protect printed film from scratching or fading from ultraviolet rays. - SK