Headquartered in Canada, TC Transcontinental operates under two main sectors: the Printing and Packaging Sector, and its Media Sector. But it’s TC’s packaging division, TC Transcontinental Packaging, that has really taken off in recent years thanks to a number of strategic acquisitions that have propelled the company among the top 25 converters of flexible packaging in North America. Today, TC Transcontinental Packaging employs about 900 workers throughout Canada and North America, offering services ranging from pre-media to flexo printing to lamination to bag and pouch making. We recently caught up with François Olivier, president and CEO of TC Transcontinental, and Rebecca Casey, TC’s senior director of marketing, for an overview of how the company has come so far in such a short period of time and where it’s poised to go in the future.
From the purchase of Ultra Flex Packaging Corp. to Flexstar Packaging to Robbie Manufacturing, TC Transcontinental has had a big couple of years. Can you explain the significance of these acquisitions and how it sets up the company moving forward?
Olivier: First, it is important to mention that we entered the flexible packaging industry with the acquisition of Capri Packaging, located in Clinton, Missouri, in 2014. This acquisition represented an important strategic move for the corporation into a new promising growth area. We evaluated various industries where we could leverage our manufacturing competency and we make sure to remain agile to find the most promising opportunities to ensure sustainable and profitable growth. The printed flexible packaging industry was rapidly identified as a natural fit given that some of the production processes were similar to TC Transcontinental’s printing operations and that the market offered many opportunities for growth.
In the fall of 2015, the acquisition of Ultra Flex allowed us to expand our footprint in the U.S. and to double our packaging revenues. The Ultra Flex acquisition gave us access to a national sales force as well as to new vertical markets, (coffee and tea, pet food and tobacco, to name a few) and manufacturing capabilities. We were proud of this acquisition that brought to the table additional industry knowledge and a highly skilled workforce.
Then, in June 2016, we acquired Robbie Manufacturing, a strategic move on two fronts. First, it allowed us to enter into two new packaging niches: on-site packaging needs for grocery stores and shrink wrap packaging of multipack consumer goods. Second, it allowed us to create opportunities for synergies with our existing facilities nearby. The Robbie acquisition also provided opportunities to gain market share by leveraging TC Transcontinental’s business relationships with food retailers in Canada.
Finally, our most recent acquisition was Flexstar Packaging in October 2016. Located in the Vancouver suburb of Richmond, British Columbia, Flexstar, our first acquisition in Canada, further strengthened our North American network. Flexstar enabled us to extend our footprint to the West Coast, providing us a coast-to-coast platform to better optimize our production and support our customer base. In addition, it brought us new manufacturing capabilities with blown film extrusion, a complementary sales force to the ones already established with our previous acquisitions, and the ability to generate synergies.
Today, these acquisitions put us in a solid position to drive organic sales growth and to pursue our diversification strategy with new acquisitions. Combined with decades of experience in printing, these acquisitions are part of our strategy to ensure our future growth path through diversification. Our vision is to be a North American leader in flexible packaging.
How important is the development of TC Transcontinental’s flexible packaging division?
Olivier: A few years ago, TC Transcontinental had operations in print and media, two industries facing secular decline. With our two main sectors of activity offering fewer opportunities for long-term growth, we took action and initiated our strategic shift, with our eyes on our future. Looking to diversify our assets and create long-term value, we took bold steps to reinvigorate our company’s growth. Flexible packaging was identified as our new growth vector.
The Packaging division is at the heart of the corporation’s diversification and growth strategy. This industry offers TC Transcontinental strategic growth opportunities, as we can leverage our manufacturing capabilities, our in-depth knowledge of the retail sector and our solid financial position to develop a North American platform. In addition to deploying capital toward acquisitions, we have already invested over $25 million in our packaging platform to increase production capacity, better support our current customers and serve new customers during the next phases of our development. One of these investments has strategically positioned TC Transcontinental Packaging to support the growing pet food market. This investment provides increased printing, laminating and converting capacity, including four-corner flat-bottom box pouch making. Our coating technology allows for flood and in-line registered specialty coatings including matte, gloss, tactile, special effects and many more. In addition, we have allocated significant resources to sales development, and these investments in our North American sales force have led to the building of a solid funnel of potential customers. In 2016, packaging activities accounted for 11 percent of the corporation’s consolidated revenue, or 14 percent on an annual basis.
Are there any notable packaging formats the company has released in the last few years?
Casey: TC Transcontinental’s strength lies in a thorough understanding of the markets in which we evolve. In staying attuned to emerging trends, we move forward by adjusting our business model and anticipating our customers’ needs. Our team at Ultra Flex took on the challenge to develop a 12 ounce, completely certified compostable coffee bag – valve and all – for Oakland Coffee and its sustainably grown organic coffee. Our team developed a three-ply metallized structure for the compostable bag and sourced bio-based, starch and sugar, materials with the optimum barrier properties required for coffee. The outcome was a perfect eco-friendly substrate, one that is made out of 100 percent compostable plant-based materials, BPI certified, rather than petroleum-based plastics, allowing the consumer to bypass the global trash stream and dispose of coffee products in a municipal compost bin. The structure also allows for reproduction of impactful graphics and stands up to filling machine performance. The true innovation breakthrough is the “degassing valve,” which allows pressure to be released from airtight bags critical to maintaining freshness in coffee bags. Our eco-friendly innovations also include compostable “mother bags,” a package that holds single-serve coffee pods, and compostable lidding for single serve pods.
We have two new developments for the fresh produce market. Our Steam N’ Eat produce pouch and our V2 lidding films for salad kits and produce snack packs both provide our customers with packaging options to meet the growing consumer demand for grab-n-go healthy eating options. The Steam N’ Eat pouch allows retailers the ability to offer customers fresh-cut produce packed in store with a value-added steamable feature. The pouch is designed with customized laser venting technology for cooking the produce evenly in the microwave while maintaining the taste and nutritional benefits of steam cooking.
Our V2 Lidding films are engineered for oxygen transmission, to maintain and extend produce freshness, with easy-peel technology for consumer convenience on rigid and semi-rigid trays. Micro perforated films are available to provide flexibility and support different atmospheric conditions for a variety of cut vegetables and salad types.
We are also excited about the launch of a multi-layer barrier pouch that is recycle-ready and qualifies for the How2Recycle label with the Sustainable Packaging Coalition (SPC). This innovation comes from Flexstar and was developed in collaboration with Dow Canada.
There’s also the Hot N’ Handy Rotisserie Flexible Pouch. Through consumer research and what the teams learned from retailers, Robbie quickly realized that a flexible package was needed. Throughout the development process, we focused on creating a flexible package of convenience, while keeping the environmental impact top of mind. The Hot N’ Handy Pouch replaces two-piece rigid dome and lids. Our team determined that the pouch generates approximately 84 percent less CO2 emissions to produce a flexible pouch versus a rigid two-piece container. The pouch also uses 92 percent less crude oil and reduces land fill waste by 66 percent. It also extends freshness with a proprietary film structure and offers consumers a resealable zipper and window to easily view the product.
It seems that the company places such a large emphasis on committing to employee satisfaction. Can you explain why this is such an important company value?
Olivier: Since our beginnings 40 years ago, our strong culture forged by our values has set us apart and guided our management approach. Our people live by our values of respect, teamwork, performance and innovation every day. We believe that working together as a team and demonstrating respect while focusing on performance and innovation is key to our success. We put trust in our people and have earned their loyalty by rallying them around our mission. Our talented teams help us leverage our strong customer relationships and always be one step ahead of the marketplace. They are the backbone of our organization and the driving force behind our success.
We create a workplace that offers exciting challenges and promotes collaboration, trust and creativity. Our priority is to attract, develop and retain talent by supporting individual development.
In your opinion, what are some of the factors that are allowing TC Transcontinental to emerge as one of the most prominent converters in North America?
Olivier: We decided to enter the flexible packaging industry in 2014 to ensure our future growth. It was a natural fit for us given our manufacturing competency. Given that the market isn’t fully consolidated, this industry offers good growth potential for us. Our acquisitions to date allowed us to welcome talented new employees to the TC Transcontinental family, people who are passionate about their jobs and eager to grow with us to create packages that are a piece of art.
Extrusion and adhesion lamination (tandem), the latest prepress technology, advanced HD and EG7 printing, and in-house registered specialty coating capabilities provide us with the technology platform to create films, pouches and bags for many industries that will protect the product and command the consumer’s attention in store. We have the ability to deliver industry leading, and competitive six-week lead-times throughout the year, allowing brands flexibility and speed to market.
To sum up, expertise combined with a dedication to invest in advanced technology allows us to consistently deliver the highest possible level of value, quality, product performance and speed to market. We work relentlessly to custom engineer the perfect film structure and package design that fits our customers product’s unique requirements – one that will provide functionality, is visually outstanding and has convenience features for the consumer.
Can you explain the thought process and initiatives behind the company’s Corporate Social Responsibility journey? What are some of the goals prior to its conclusion in 2018?
Olivier: For TC Transcontinental, social responsibility is about sustainable profitability in the pursuit of our business activities, while safeguarding a healthy environment and being engaged in the communities we serve. Our corporate social responsibility journey began when we adopted our environmental policy in 1993. We then formalized our commitment by outlining a structured approach implemented through three-year plans. This allowed us to focus on the issues that were most relevant to our operations while setting related objectives on which we aim to progress over the short term.
We are proud of what we have accomplished to date, but we feel that we can continue to improve. With this in mind, we have developed our 2016-2018 corporate responsibility plan by establishing quantifiable targets that are in line with our strategy and by taking into account input from our stakeholders. This plan addresses topics related to our prosperity, our employees, the environment and the communities in which we operate. In total, our plan has 14 main objectives.
What does the future hold for TC Transcontinental?
Olivier: Because we strive to create long-term value, we will continue to execute our two-pronged growth strategy in flexible packaging: Maintaining our disciplined approach to acquisitions in this promising market and continuing integrating the acquired companies.