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Paper or Plastic?

18.05.2007

Regardless of the answer, altivity packaging provides a variety of packaging solutions for its customers.

By now, the question has become cliché; for years the punch line of comedians’ jokes. These days, most supermarket customers aren’t even given a choice: plastic bags are it.

Altivity Packaging still provides its customers with the option: paper or plastic? The company’s flexible packaging product profile includes offerings such as multiwall bags, consumer and specialty packaging products, label solutions; inks and coatings, coated paper and pet food packages, contract packaging and laminations for a variety of consumer and industrial applications.

Altivity was born when Texas Pacific Group bought Smurfit-Stone Container Corp.‘s consumer packaging segment for $1.04 billion in the summer of 2006, and soon after merged with Field Container Co. to form a broad-based packaging company that is an industry leader in not only flexible packaging, but also rigid folding cartons. This gives Altivity a unique position in the packaging world.

“We’re one of the largest folding carton manufacturer in North America, and we are the largest producer of coated recycled board for folding cartons,” says Gary McDaniel, vice president and general manager of Altivity Packaging’s Flexible Packaging Division. “Those two products make up approximately 60 percent of the corporation, and the flexible packaging division makes up the balance.

“[The flexible packaging division] is the largest supplier of multiwall bags by a very large margin, and a significant producer of flexible packaging or plastic products as well as being an industry leading supplier of label products of a variety of constructions. We’re the largest supplier by far of heat-transfer labels; we’re an industry leader in shrink sleeve label production, and an industry leader in the litho-label or cut-and-stack paper label market.”

Having such expertise and knowledge across multiple packaging disciplines puts Altivity’s customers in an advantageous position, where choosing the right packaging option comes directly from working closely with a single converter; in this case, Altivity Packaging.

“The strategic fit of the plastics business for us is to a great extent a corollary or a support mechanism for our multiwall bag division,” says McDaniel. “Our knowledge of co-extruded films and barrier films allows us to manufacture the plastic alternatives for paper packaging. That allows us to provide, when necessary, a solution-neutral choice to our customers, and they decide whether paper or plastic is the packaging form they want to take to market.”

John Moran, Altivity’s vice president of business development, explains that the company’s business focus is to do two things very well: be a provider of niche packaging, and be the leader in the multiwall bag business.

“We [in the flexible packaging industry] have a tendency to get into this “paper good, plastic bad” mentality, and that’s not the way we run our multiwall bag business,” he says. “The more barrier materials, the better it is for our customers and for us. When we talk about flexible packaging, it includes the composite materials in a multiwall sack.”

Altivity’s broad product line allows it to capture business from paper multiwall bags to standup pouches of pet food to folding cartons of cereal, including the co-extruded liners that go with those cartons, not to mention labels and even retort pouches from military applications.

“I think we are perhaps the most broadly based packaging company that I can think of, and certainly we have technology across a very wide array of industries and product sectors,” adds McDaniel.

Cross-Training

No longer part of Smurfit-Stone, Altivity boasts roughly 8,000 employees in the United States, Mexico and Canada, with its headquarters in Carol Stream, Ill. The new identity appears to be a positive change for those involved, and there are a few advantages built into the move.

“There are a lot of changes, and they involve the sense of urgency; the sense of thinking of a business as though it’s your own money,” says McDaniel. “You operate it in the sense that you do the smartest thing both tactically and strategically, and you act upon decisions quickly and with less internal barriers.

“We don’t want our customers to notice much [with the move from Smurfit-Stone], other than we’re very responsive and have an urgency to get products to the marketplace perhaps even faster even than we did previously. We have partners that share that need and desire to take products to the marketplace quickly rather than over a protracted introductory period.”

Joe Marinacci, vice president of sales and marketing for Altivity’s plastics packaging group, adds: “I think also our customers will see us be much more aggressive in selling multiple package forms to the same customer.”

After Texas Pacific Group (TPG), a Fort Worth, Tex.-based private investment firm, formed Altivity, one of the first things it did was restructure some of the disparate parts into a more cohesive, strategic business unit. The flexible packaging, bagmaking and label making units were combined in an effort to develop products that touch on each sector, offering customers a whole that is more than just the sum of its parts.

Moran says that although it may be an overused term, Altivity is a true ‘solutions provider’ for its customers.

“It’s a worn-out word, but we give you want you want – whether it’s all paper, all plastic or a composite; that’s what Altivity can do. We’re going to put you in the right product, rather than trying to force-fit you; he says.

“We’re uniquely positioned to be able to do multi-product offerings better than anyone in the industry,” says McDaniel. “I think that we’ve been able to effectively combine our sales efforts in having the plastics sales team sell both plastics and labels, for example; and the label sales team also sells flexible packaging; and the bag team also sells flexible packaging, etc.

“So we’re trying to move closer to the sales and marketing model that would have our sales representatives knowledgeable and expert in all three product categories. And we think that’s a way to bring value to our customers and enhance the way we go to market, and hopefully reduce some of our sales and marketing expenses.”

Marinacci notes that the developing focus customer service is one of the keys that will set Altivity apart from its competitors.

“There’s always room for improvement in all aspects,” says Marinacci. “We do live by, and believe in, continuous improvement. But in the near term, we’re focused on improving our service to our customers; short-cycle response time, and enhancing and developing our printing capabilities in all of our facilities. We have a state-of-the-art 10-color wide-web flexographic printing in our Milwaukee facility, and we want to provide more of our facilities with that type of printing in the future.”

Expansion and Improvement

Improving the company’s technological footprint has been a priority for Altivity from day one, and that move is clearly visible to anyone who visits its Milwaukee plant.

“The company is taking a generous and expansive look at capital,” says McDaniel. “Last summer we opened an additional 50,000 sq ft expansion of our Milwaukee factory, with the installation of a 7-color, co-extruded film making line, and a wide-web 10-color flexographic printing press. Between those three things we invested roughly $15 million dollars in order to expand.”

But the expansion of the business doesn’t end with simply updating equipment and adding operation space. Altivity made a business move that many large converters may overlook, but its one that has benefits rooted not only in financials but in social responsibility.

“The other thing we’ve done in response to our major consumer goods with a minority business enterprise that leases space and machinery in our Milwaukee plant,” says McDaniel.

The name of that company is EIJ-Altivity Packaging, Altivity and EIJ Plastics. The minority enterprise began operations in 2005 and produces thin-gauge and high-density films for barrier and non-barrier food packaging applications. The purchase of the new co-ex line was specifically for the minority enterprise.

“It’s a flexible packaging and label supplier to major corporations who have a strategic need to purchase industry-leading quality, competitively priced material from minority firms, in order to meet the social obligations their management and shareholder have determined are appropriate for them,” says McDaniel.

Marinacci adds: “It’s not limited to just co-ex films and laminated label stock. It’s really anything that we together can make. Laminations for cookies, crackers, cheese, etc. There’s really an endless array of products that the joint-venture can enter into. Customization is one of the advantages of this partnership.

“You’ll also see the flexible group having significantly increased visibility at top-tier consumer products customers, facilitated through the EIJ joint venture,” he adds.

Altivity’s flexible packaging group prints only with flexographic printing presses and the Milwaukee operation boasts a new 10-color Infinity press from PCMC. In addition, the new expanded plant features large blown film extruders from Brampton Engineering, Battenfeld Gloucester and Keifel.

Interestingly, there are only three of Drent Goebel’s innovative and much talked-about variable sleeve offset printing (VSOP) presses in the United States, and Altivity has two – one in its Louisville, KY plant and the other in its Greensboro, NC location. The VSOP press combines the advantages of both offset and flexo, resulting in an extremely adaptable machine with variable print lengths.

Evaluating Efficiency

The company has its collective eye on adding new equipment throughout the flexible packaging unit, but it will only do so when the timing makes sense and it finds the right machine for the right application, maximizing efficiency.

“We’re evaluating adding wide-web, high speed tandem co-extrusion coater laminators to our network system, in order to expand into other product categories,” says McDaniel. “There are a few different things we’re looking at, but we always want to add new technology, as long as it fits what we’re trying to do.”

What Altivity is trying to do is run – tongue in cheek – a lean mean packaging machine.

“We are a company that has embraced lean manufacturing, and we’ve made the commitment to drive that through all of our manufacturing locations – that number nearly 60 – within this calendar year,” says McDaniel. “We’re on pace to have it become a key and significant part of the Altivity operating system. We’re a great believer in not only offering great technology to our customers but also doing our very best to limit our costs, so that we’re highly cost-competitive at the same time that we’re an industry leader in innovation and technology.”

But to be sure, running a lean operation does not mean corners are cut. In the plastics group, all of Altivity’s converting facilities are ISO 9000 certified and AIB certified, solidifying the company’s commitment to quality and safety.

For Altivity, beyond the growth and acquisitions, the future holds continued development of its unique and broad product offering, including enhancements of current applications and combining technologies for new ones.

You’ll see continued application of the open/close features on our multiwall sacks and other easy-open/close features on standup pouches,” says Moran. “And like most other flexible packaging converters, we’ll focus on thinner gauges, engineered barrier properties and laminations. We’ll also develop more composite packaging, utilizing both our paper and plastic operations. Faster, cheaper, better.”

By BRENDAN O’NEILL

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