In the world of converting, companies come and go, while mergers and acquisitions happen often. In other words, change happens frequently as converters strive to expand their businesses.
A prime example of an emerging converter is PPC Flexible Packaging, a rising company based in Buffalo Grove, IL. PPC debuted in the No. 19 spot in Flexible Packaging’s 2019 ranking of North America’s Top 25 Converters. The company is pursuing an aggressive growth strategy with five acquisitions in 31 months, according to Kevin Keneally, CEO of PPC Flexible Packaging.
PPC specializes in ﬂexographic printing and converting of ﬂexible ﬁlms, bags, and pouches. It is a recognized pioneer in cleanroom packaging for healthcare and medical applications, “better for you” snack and organic brands, produce, pet food, bakery and horticulture. The company operates seven manufacturing facilities in Buffalo Grove, IL; Mission, KS; Rome, GA; Payson, UT; Pewaukee, WI, McKinney, TX; and Colombia, South America. Its facilities are SQF and
The most recent purchase occurred in October 2019, when PPC purchased Popular Ink LLC, a Texas based converter focused on short-run, high-service specialty packaging for health, beauty and nutraceutical markets.
Unique and Differentiated
Keneally explains that this purchase fits the company’s strategic goal to build a unique and differentiated packaging converting business. “We want to focus on niche applications and growth markets,” he says. “We want PPC to stand out as something different, not just another face in the crowd. PPC fills a space between mega-cap converters and smaller, regional converters who might have fewer resources.”
In 2016, Keneally and members of management teamed up with Morgan Stanley Capital Partners to create PPC Flexible Packaging. Together, they made acquisitions that included Fisher Container and Packaging Products Corporation in 2017, Temkin International in 2018 and HFM Packaging in 2019 as well as Popular Ink.
“We are very specific in the types of companies we want to acquire,” Keneally says. “They have to be unique and differentiated, and they have to be focused on specific niche markets — not the larger mass markets. They also have to be capable of short- to mid-size runs since we know that’s our strategic advantage. Typically they are already in the markets we play in today.”
PPC Flexible Packaging established a vision statement and nine key principles that set the foundation for the company going forward. “As we go through every acquisition, we overlay the vision and statement into each acquisition,” he says. “When we run the company through our weekly KPI (key performance indices) meetings, we reinforce the vision statement and principles.”
And while PPC plans to continue with further acquisitions, Keneally points out that they also want to continue to grow the business organically since each of product markets in which the company is involved is a high-growth segment.
Focus On Specialty Markets
For example, markets that PPC serves include floral, specialty produce and organic snacks.
PPC recently opened a 70,000 square foot production facility in Bogota, Colombia to serve the floral market. That country is the leading exporter of flowers, supplying approximately 85 percent of the fresh flowers sold in the United States, according to Tatiana Perez, PPC vice president of floral, gift sales and corporate marketing.
“There is an entire world of flexo printing within the horticultural market,” she explains. ”It’s quite different because it is surface printing for the most part and it entails a lot of design.” PPC does have a large team of designers and engineers to help customers develop both the graphics and structures for their packaging.
Flowers are seasonal, and there are large peaks and valleys throughout the year due to holidays where flowers are popular gifts. Most flowers are wrapped in branded or seasonal decorative sleeves designed to help preserve the flowers during shipping through an international cold chain. PPC’s Optimair floral sleeves are designed to provide better airflow, faster cooling and reduced condensation.
PPC also provides specialty fresh produce packaging for boutique varieties. Perez says PPC has the technology to allow vegetables to respirate at specified levels. This packaging is laser-perforated using a patented process that PPC developed in conjunction with a technology partner. Their HYDRO-SURE film packaging helps control moisture to prevent fogging, while extending shelf life.
Another specialty segment that PPC serves is the “better-for-you” organic snacks market. In this segment, it’s about getting to know the brands. Many are smaller startup firms that will grow over time, Keneally says. “They almost always require short to mid-size runs because they’re smaller firms. Usually they’re looking for better graphics because they want their package to stand out against competitors, and they’re always looking for convenience features. Those are the things we think set us apart.”
Establishing A Single Brand
All these divisions have now been unified under the PPC Flexible Packaging name, except for their floral business, an established brand under the Temkin name. In an earlier interview, Keneally said: “We needed to rebrand the company into one entity. This is the perfect opportunity to do that with a story we can now take to the marketplace. It’s rebranding under one refreshed brand. We’ll get our story out in front of our key customers and our developmental customers. It gives us an opportunity to tell what our capabilities are,” he said.
And those capabilities are considerable. PPC specializes in 10-color process work across most facilities. Currently, the company is running with 19 flexographic presses that span narrow to wide webs, primarily manufactured by PCMC. They typically run nutraceuticals and stick and gel packs on narrow web presses, while the larger wide-web presses run shrink sleeves, pouches, bags and large repeat items. In addition, they have more than 80 machines to manufacture bags and pouches, including machines from Totani, Mamata and Hudson-Sharp.
Buffalo Grove is the only plant in the portfolio that has two clean rooms that are ISO Class 4 and ISO Class 7 certified for producing medical and healthcare packaging. All the other plants have the capacity to run similar structures for all the markets, and PPC will actively will move orders among them to be more responsive to its customers.
While PPC does not manufacture substrates or extrude films, it is highly integrated in its printing and finishing operations. It makes its own flexo plates and is capable of running 300 line screens for high-quality printing. In addition to producing what Keneally calls “best-in-class printing” of rollstock, PPC also performs laminating and manufacture of premade pouches.
“We think our portfolio of capabilities and technologies is among the best in the industry today,” Keneally says, pointing to their focus on short runs, high quality and short lead times.
Emphasis On Short Runs
“Because we are focused on short- to mid-sized runs, we are extremely confident in our ability to get in and out of short runs on flexo presses,” he says. ”It’s one of our core competencies. Literally every one of our plants has the ability to run short jobs. That will continue to be our focus going forward.”
Many of the runs are on press less than an hour, so the need to complete changeovers quickly is a high priority. The company employs a variety of SMED techniques on changeovers. SMED, short for Single-Minute Exchange of Dies, refers to a method in the Lean Production System that is used for quick, simplified and efficient production set-up and changeover, which often constitutes a major cause of production downtime.
“Lead times are important to our business and it’s a big challenge as we continue to grow our business to make sure we invest in new assets and resources that allow us to offer best-in-class lead times,” Keneally says.
Sustainability is another major concern for the converter. The company recently introduced PPC Green, a combination of product offerings and sustainable practices as its approach to sustainability. They now offer Earthpack, a bi-layered polyethylene pouch that is part of the How2Recycle program. PPC also has launched BioPouch, which is made from PLA and is compostable in industrial composting operations.
Of equal importance are the company’s sustainability practices, Perez says. “Everything we do, we do in-house to maintain more control of our manufacturing processes,” noting that practices such as using lasers to clean aniloxes, which reduces water usage, and constant recycling of materials and scrap. Most importantly, she says the company is always innovating, working with its customers and film suppliers to stay on top of what are latest and most sustainable films and downgauging where possible.
Close To Its Customers
Perez says another strength of the company is that PPC has “a lot of amazing and credible relationships with mass marketers and retailers, as well as with the customers that feed into those stores. We leverage our relationship with our customers to give them the right product offering.”
PPC also works extensively with retailers, such as Texas grocery chain H·E·B, that own recognized private brands. The own brands are a huge category that is growing within the packaging industry, she says, so they are a natural target for PPC Flexible Packaging.
“We want customers to recognize this is a firm that has the resources of the big guys but we’re responsive and can service customer needs with great lead times,” Keneally emphatically says.