Local history has it that the Commonwealth of Kentucky was quite possibly named after a native expression that translated to “land of tomorrow.” Quite fittingly, Kentucky and its storied ability to generate prosperity is exactly where Coating Excellence Int’l. (CEI) recently opened its second plant in Hebron, starting the latest chapter in one of the flexible packaging industry’s strongest success stories.
First established in Wrightstown, Wis., in 1997, CEI was formed with a basic axiom in mind: to deliver the best customer service, product quality and innovation to the packaging industry. Over a decade’s time, the company expanded its lone plant seven times, gradually making room for additional converting processes like coating and laminating lines, bag-making machines, and flexo and offset printing presses. During this explosive growth, however, staying true to a customer- and quality-oriented strategy, says CEI president Mike Nowak, was integral in accelerating a company from zero to an estimated $250 million in sales in 2010.
“Most of our growth over the 13 years we’ve been in business has virtually been all organic,” says Nowak. “And it has come from serving customers well and responding to customers asking us to bring our core competencies into key markets without going too far afield.”
“Most of our customers view us a preferred supplier, and as a result, we get a large share of their business,” says Nowak. “To work with a company that has a large share of your business but doesn’t have multiple sites in case of disruption might cause those customers to worry. Hebron really gives our customers a sense of security that we have backup manufacturing processes.”
Besides establishing redundant processes in case of catastrophe, CEI vice president of flexible packaging sales Lynda Swenson points out the Kentucky location brings her company closer to customers in a physical sense, too.
“We have a fairly large customer base in the Southeast and the Hebron plant really provides a strategic location for serving this area,” says Swenson. “This will help continued growth in flexible packaging.”
Robb Schaefer, vice president of flexible packaging, agrees that the second facility will solidify supply chains to clients in the southern U.S. But he also believes, quite simply, the timing for this move was right.
“To some degree, we’ve outgrown one facility,” says Schaefer. “It’s hard with our size to do all that we do at one plant, and even if we keep expanding it, I think we start to lose some efficiencies. Part of the success at CEI is we’ve really managed to grow enough to make Hebron the next logical step.”
As with virtually any expansion, growth or addition-especially when starting a plant virtually from the ground up-a company ought to expect at least some growing pains. Nowak says his company was able to keep these to a minimum simply by ‘calling all hands on deck’ well in advance and getting everyone in CEI to think outside the walls at Wrightstown.
“About three to six months before [Hebron's opening], we ran simulations of how we would operate,” recounts Nowak. “In effect, we divided our manufacturing capabilities, and said, ‘This is Hebron, this is Wrightstown.’ That helped us to make a very smooth transition.
“Of course, we have a very customer-focused, employee-oriented culture here at Coating Excellence, and we had some concerns about making sure we engrained that,” continues Nowak. “Probably one of the biggest challenges is getting people here to think beyond, ‘When I make a decision, how does it impact Wrightstown?’ Now we have to think about a second plant and be sure we touch all the bases before we make any kind of a change.”
To this end, Hebron plant manager Larry Andrews joined CEI at Wrightstown nine months before opening the doors on the new facility, absorbing the CEI culture during this time to ensure it would carry on some 400 miles south in Kentucky. Further, four experienced operators opted to relocate from Wisconsin to the new plant, creating something of a nucleus group from which new employees could learn and grow.
Essentially an alternative to sewn-closure bags, woven PP SuperTube bags feature a pinch-bottom, heat-seal closure on one end and virtually any closure, including a roll-fold/tape or slide zipper, on the other. These impressive attributes, combined with up to 10-color printing and substantial material savings compared to multiwall paper bags, clearly resonated with CEI clients.
“One customer said to me that we ‘split the atom,’” remarks Swenson. She recalls that more than two years ago, CEI identified that woven bags were well-accepted with the exception of their sewn closures, which were regarded as outdated. In the time leading up to the SuperTube’s launch, CEI researched, developed and tested a PP structure that offered the best resistance to heat, moisture and product damage while going where no woven bag had gone before-making it sealable.
“Woven has its own challenges because we can’t use the same heat used in sealing a paper bag,” says Nowak. “But we’ve been able to develop woven bags for bulk dry goods, like pet food, which have been in paper multiwall bags for a long time. We’re seeing a lot of interest among the major retailers or major suppliers to the retailers who want to get into that product.”
In other efforts, CEI has also recently introduced stand-up pouch formats made from recyclable substrates, a response to both sustainability goals and customer requests.
“Several of our customers wanted a recyclable pouch-and we delivered,” says Swenson. “What used to be a lamination of two different materials-which made it unrecyclable-was changed to a monolayer product. Because it's only one material, our customer is able to put the ‘chasing arrows’ [recyclable logo] on it.”
The SuperTube and recyclable pouch products are but a few examples of CEI's bevy of flexible packaging innovations. And although the company has had its hand in flexible packaging converting since Day One, it wasn't until recently that CEI formalized a group dedicated to flexible packaging in name and purpose.
“CEI grew around ream wrap, then sugar packets, but we're expanding beyond that,” says Schaefer, who was hired in late 2009 specifically to shape CEI's flexible packaging growth. “We produce a lot of stand-up pouches for pet food treats and dry mix, but we're also developing more cheese packaging and wipes packaging. Our efforts are based more on the technologies that we possess rather than a specific set of markets.”
“With flexible packaging, every company has its niches and areas of expertise that others may not,” says Nowak. “In the niches that we historically participated in, we’ve tended to know the customers and the customers have known us, without our having to do a lot of advertising or promotion.
“Then we began a conscious effort early this year to become a full-line flexible packaging supplier,” continues Nowak. “That means there are a lot of people out there that don’t necessarily know the CEI name or the quality and service that we offer. So not only do we have to make sure people are aware that they have this ‘new,’ supplier available, but we also have added industry experts to represent us in the field and help expedite our growth.”
On to TomorrowAll this talk about growth, expansion and improvements begs the question: What's next for CEI? Perhaps one way of putting it is staying the course.
“Areas for improvement that I see include increasing our reach into other markets, which is what we’re doing right now, and increasing our footprint, which we’re also doing right now,” notes Schaefer. “We want to grow the size of this company without losing the small company ‘feel’ of it, including our customer service and responsiveness. We want the best of both worlds, and that’s what we’re trying to do.”
“If we’re going to be a major player, major players must have multiple plants,” asserts Swenson. “Although it wasn’t always our strategy to operate more than one facility, multiple locations will certainly make us stronger.”
Whether CEI maintains two plants or two dozen, Nowak believes continuing with the service fundamentals that have brought his company this far will continue to work well into the future.
“A lot of our success is keyed around service, and we'll build on that,” notes Nowak. “Service is essential, whether it’s as simple as generating a price quote or closing out a large order, we do everything we can to treat the customer as we’d like to be treated.”
On the Hebron Plant FloorAlthough Hebron plant manager Larry Andrews officially joined Coating Excellence in the second half of 2009, you might say he's been the company since its infancy. Andrews, with nearly 35 years in the paper industry before his position was eliminated last year, was first introduced to CEI in 1998 as one of its first and currently largest ream wrap clients.
“Once my job was eliminated, I called some people I knew at Coating Excellence through the 11 years I was a customer,” recounts Andrews. “The people that I knew in sales and quality positions from when we first started working together were now pretty prominent people within the company. Before long, they offered me the opportunity to come talk to them about the plant manager position.”
The very qualities and standards for service and innovation that Andrews enjoyed as a CEI customer were precisely what drove him to join the converter as a leader at the company.
“I also liked that CEI is a very people-oriented company that’s receptive to change and remains open-minded,” says Andrews. “And CEI is not afraid to invest their money in quality people and quality machines.”
Once CEI brought Andrews into the fold, he spent nine months in CEI’s Wrightstown facility, absorbing all sorts of knowledge, from technical know-how on products and machines through the finer points of CEI's employee-focused culture. Although Andrews says this time served him well, it didn't completely eliminate the challenges he would face on Day One in Hebron.
“Hiring people turned out to be a bigger challenge than I anticipated,” recalls Andrews. “We wanted good people that fit the CEI philosophy of a fair day’s work for a fair day’s wages-and there are so many good people out there today.” Andrews points out that even as selective as he was in considering and hiring local candidates, he and the company have been fortunate to attract top talent that will serve the growing plant far into the future.
“We haven’t lost one of those first employees,” says Andrews. “We pay a good wage for the area and solely because we wanted to retain people.”
The first 16 employees currently working full-time in Hebron stand to progress within the company, a true win-win for both parties.
“When the time is right, and we do expect it to be sometime this year, we'll add a second shift and everyone here would be able to promote” to operator and shift leader positions, says Andrews. “Another one of our challenges is laying the proper groundwork for additional growth, and that starts with employees. All of the people on the floor now will become operators and the people that we later hire will become the entry-level workers the same way that these gentlemen and ladies started out.”