Exopack: Converter on the go
North American converters face intense competition from virtually all corners of the world. At the same time, record fluctuations in the prices of raw materials rub like salt in deep wounds. How could a flexible packaging converter faced with these challenges successfully grow-much less maintain-business?
Exopack has turned to its growing network of global production partners in its mission to deliver paper and plastic flexible packaging solutions to the many markets it serves. This strategy effectively complements the manufacturing capabilities of Exopack’s 17 production facilities in North America, plus one in the United Kingdom. The list of applications Exopack addresses is long and includes lawn and garden, food and beverage, pet products, medical, agricultural, chemical and mineral, industrial and electronic markets.
“We’re a solutions provider,” says Lani Craddock, vice president of corporate marketing and innovation development. “Whether we manufacture it or whether we find it externally, we’re going to find the right solution for our customers. It’s a competitive advantage that Exopack brings to the table."
GO EAST, YOUNG MANExopack flexes its international muscle under the brand name Global Packaging Linx (GPL), a strategic initiative aimed at securing flexible packaging resources-including films, rollstock and completed retort pouches-from a global network of packaging manufacturers who share Exopack’s quality and service standards. Through this program, Exopack matches the requirements of its multinational customer base with both its domestic capabilities-which include film extrusion, coating/lamination and bag/pouch-making-and low-cost, high-quality offshore technologies offered by global partners. In identifying global partners for the GPL network, Exopack evaluates the prospective partner’s cost structure, quality standards for manufacturing, efficiency in logistics and technical expertise.
In April 2009, GPL partner and Lebanese flexible packaging converter INDEVCO became a stronger link in Exopack’s international initiative when the two companies entered into a joint venture agreement to produce co-extruded polyethylene film in the Middle East. The initial step in a larger strategy to build a network of Middle East film production sites, the joint venture allows Exopack to tap the growing polymer manufacturing capacities in the region while providing an economic advantage to Exopack’s North American client base.
“We’re always fighting the volatility of the price of materials in North America,” says Scott Ross, senior vice president and general manager, Performance Packaging Division. “It is a global marketplace and we play in that marketplace. We try to find ways to flatten that volatility, to take some of those peaks and valleys out, so our customers get more consistent cost models to deal with and are confident in the product we deliver.”
According to another Exopack executive, the joint venture allows the company to deliver more than just cost-savings.
“With the wealth being created in Saudi Arabia, Qatar, United Arab Emirates and Egypt, flexible packaging is becoming really sophisticated in that area, too,” says Virag Patel, director of international strategies. “We’re looking to see what we can pull back to our customers. Yes, we have lower costs, and, yes, the volatility of prices of raw materials is generally better. But we don’t normally think of the technology there as being advanced, but it is getting to that stage. We are having more discussions to find out what new technologies exist off-shore and how we can bring those technologies here.”
The joint venture, named Cedex Plastics S.A.L., has been several years in the making and has come with its challenges that Exopack and INDEVCO have, naturally, tackled together. As Patel explains, two large advantages include INDEVCO’s 50-plus years in the Middle East manufacturing market and Exopack’s diligence and experience in streamlining the logistics process.
“Some of the challenges there you also experience here, including availability of resources, labor and energy-the availability of energy is sporadic in some areas," says Patel.. “I think the biggest [barrier to entry] has been logistics, and getting material from there to here is a science, really. We’ve gotten the transit time from the Middle East to here down to less than weeks." For Exopack customers trying to satisfy end-users here, competitive pricing on a quality product means nothing when lead times are measured in months, explains Patel.
In early August 2009, Cedex Plastics announced it had made its first investment in equipment, a 3-layer Varex co-extrusion line from Windmoeller & Hoelscher, with the specific intent that the machine would produce film for export to the North American market. A key aspect to the joint venture operation isn’t just about what Exopack can bring to North American clients, but what Exopack can bring to its overseas partnerships, where Patel notes recent capital investments are happening.
“Domestically, Exopack is one of the few that’s investing as much as we are here,” says Patel. “Overseas, though, we’re actually working with our partners as they’re investing in assets. As they’re buying new assets, we’re helping to spec some of those presses and converting machinery.” Patel further explains that Exopack works closely with its partners in identifying effective inks, aniloxes and more with the goal of creating prints internationally that look and perform the same as prints created in Exopack’s North American plants.
NOT ALL QUIET ON THE WESTERN FRONTClearly, Exopack has worked closely with its global partners to ensure consistent practices and quality products by instilling another basic strategy to insulating against intensified competition-investing in more efficient equipment. Just as Exopack imports cost-effective flexible packaging to North American markets, the converter also brings a continuous improvement and investment strategy back to its 10 plastics converting plants, six paper plants and two coating plants.
“You could look at this with two different philosophies,” says Robert Arvanites, senior vice president and general manager for Exopack’s Pet Food and Specialty Products Division. “One is you can sit still and weather the downturn. Or two, you’re looking for opportunities, which we have, and we’re investing in equipment.” Arvanites explains that equipment hasn’t been as cost competitive in recent years as it is now and Exopack sees this as a prime opportunity for both future innovations and economic recovery.
Historically, Exopack’s equipment selection targeted long runs and huge production volumes. In contrast, the investments being made today address Exopack’s ever-strong drive for timely production and several industry-wide trends, including the explosion of stock-keeping units (SKUs) and product differentiation.
“Printing is one of our major strengths and we’ve had very good printing assets-so that’s where we’re investing today and looking ahead to in 2010,” says Steve Mullins, manufacturing manager for Exopack’s Tomah, Wis., plant. “Another fleet of presses with quick changeover and quick set-up will make sure we’re keeping up with market needs where that SKU proliferation trend is taking place.”
Given Exopack’s position as a full-service packaging converter, the company is investing heavily outside the printing arena as well. The investments, like Exopack’s capabilities, run the gamut and include laminating lines, coating technologies, film converting lines and bag/pouch-making machines. Likewise, the converter continues to pursue the consumer convenience trend by investing in easy-open, recloseable and press-to-close technologies and venting solutions. While Exopack makes a variety of investments, Lani Craddock explains that the various strategies start with the customer and move Exopack toward a common goal.
“We go back to our customer and ask, ‘What is it you’re looking for in your future package?’ and we then look at what technology platforms will service that,” says Craddock. As consumer packaged goods companies cut back on advertising in nearly all mediums, Craddock notes that the package has assumed the role of advertising for Exopack customers. Investments in graphics and coatings, speciality coatings and consumer features ultimately pull a consumer to the product on the shelves.
“Whether it’s graphic enhancement, new material science, consumer convenience features or new converting technology, we’re looking for that ‘Wow!’ factor in a new package,” says Craddock.
In this pursuit of new technologies with applications in packaging, Exopack also leans on its subsidiary, Exopack Advanced Coatings (EAC), which the company acquired in 2007. EAC traditionally manufactures high-performance specialty substrates mainly for electronic and medical markets. While some of EAC’s newest developments include conductive films used in electric car batteries or light-distributing films, David Neal, vice president of EAC’s North American and Asian operations, explains the synergies his division shares with Exopack’s converting operations.
“We’ve actually done a number of packaging projects in the past-including barrier films," says Neal. “We have full R&D organizations both in our Wrexham, North Wales, plant and our Matthews, N.C., plant who are working with a lot of developments and new applications.” Just like Exopack and its global partners, the teams in Matthews and Wrexham work with their packaging cohorts in developing effective packaging solutions when needed.
GOING FORWARDSince the company began in 2001, Exopack has provided both paper and plastic solutions, initially providing the logical framework around which the company was organized. In July 2009, however, the converter shifted gears and organized by end-use markets served-consumer and performance (or industrial applications). While this new structure allows Exopack to better focus on the diverse marketplaces it serves and virtually puts the converter in a position to do it all, there’s one caveat.
“We’re not trying to be everything to everybody,” says Ross. “The new organizational structure is really going to push more of that market focus back to our customers where we’re delivering solutions. But we’re just not going to do everything.”
In that vein, Exopack does not expect its plants to do everything, a point the converter has emphasized by transitioning key plants into Centers of Excellence. Says Arvanites, limiting the number of processes under one plant roof permits everyone in that facility to focus on who the customer is and what that client requires.
“There’s a lot of emphasis on our Centers of Excellence within our manufacturing platform and driving everyone from the shop floor level up,” says Arvanites. “I think any company can tell you they can improve on that.”
Going forward, Exopack anticipates that its current course of continuous and far-reaching improvements will serve its customers and, in turn, its internal initiatives well. While some advances have yet to take shape, how Exopack plans to maximize that potential is clear says Neal.
“Exopack is willing to invest in new technologies and drive those to the next level,” says Neal.
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SIDEBAR: Top notch with TomahIn May 2009, Exopack cleaned up in the Flexographic Technical Association’s 2009 “Excellence in Flexography” competition, taking home Best of Show honors in addition to gold, silver and bronze awards. While the awards solidified Exopack’s position as a leader in flexographic flexible package printing, it also confirmed Exopack’s Tomah, Wis., plant’s status as a Center of Excellence, where all five award winners were produced.
“We developed the Tomah plant into a Center of Excellence for printing, laminating and converting,” explains Robert Arvanites, senior vice president and general manager for Exopack’s Pet Food and Specialty Products Division. “We’ve moved the extrusion capacity from there so the employees there can concentrate on being the best at what we’re asking them to do.”
At 156,000 square feet, the Tomah plant houses two laminators, a pair of 10-color presses and two 8-color presses, one which is currently being rebuilt and the other which is freshly rebuilt to keep pace with technically sound printing required by Exopack’s customers. Tomah’s printing assets are complemented by an even stronger asset-more than 150 employees, 40 of whom have at least 30 years of industry experience.
While Tomah’s FTA accomplishments certainly set the bar for flexible packaging converters everywhere, the awards also establish a benchmark for other Exopack plants to aim for, a goal which Exopack leaders are determined to meet.
“We’re trying to get all of our printing capability to that level so that you don’t have to worry about where, which plant, or which printing press you’re going to put a job on,” says Arvanites. “You’re going to have those kinds of results wherever you go.”