The Western Union—November 2017, Canadian Packaging
Strategic West Coast acquisition provides another perfect fit for the fast-growing flexible packaging products powerhouse
December 4, 2017
by George Guidoni, Editor
Caption: Equipped with state-of-the-art film production and converting equipment, the vertically-integrated Flexstar operation in Richmond, B.C. runs a busy 24/7 production schedule throughout most of the year to produce high-quality flexible packaging products for a diverse range of customers across western North America serving the cereal,–nutrition bars, confectionery, frozen foods and coffee markets.
Building a trail-blazing industry leader from scratch in a fiercely competitive market can be a daunting endeavor.
But for the Montreal-headquartered TC Transcontinental, the publicly-traded company’s robust growth in the North American flexible packaging industry in the last three years bears all hallmarks of a sound business plan carried out to textbook perfection.
Since its formation in the spring of 2014, the TC Transcontinental Packaging division has orchestrated a string of well-executed strategic acquisitions that have boosted its status and market reach in leaps and bounds—today ranking as one of the 25 largest North American producers of flexible packaging products.
Starting with the 2014 acquisition of Clinton, Mo.- based Capri Packaging and following up with the 2015 buyout of Brooklyn, N.Y.-based Ultra Flex and Lenexa, Ks.-based Robbie Manufacturing in the summer of 2016, TC Transcontinental’s strategic move into the world of flexible packaging has proven to be a resoundingly astute example of business diversification leveraging the company’s traditional strengths in the printing and publishing industries.
And while its latest acquisition may not have been its largest, the October 2016 purchase of the Richmond, B.C.-based Flexstar Packaging Inc. has a comforting patriotic vibe to it well befitting one of Canada’s most illustrious and successful business enterprises generating about $2 billion in annual revenues.
As company president and chief executive officer Francois Olivier stated at the time, “I am proud of this latest acquisition in our strategy to grow our flexible packaging network as it is our first in Canada.
“Flexstar enables us to extend our footprint to the West Coast,” Olivier explained, providing us a coast-to-coast platform to better optimize our production.
“In addition, it brings us new manufacturing capabilities with film extrusion, a complementary sales force, and the ability to generate additional synergies.”
For Flexstar Packaging president and co-founder Marc Bray, who has headed the company since its inception in 2005, the opportunity to take the company to the proverbial next level of growth as part of the fast-growing TC Transcontinental Packaging group of companies is a resounding validation of Flexstar’s own stellar record of organic growth that helped it generate $36 million in the fiscal 2016.
“The sale to TC Transcontinental was a very good strategic move for our company,” says Bray, “and we believe it was mutually beneficial.
“TC Transcontinental brings the overall experience and organization of a large manufacturing company in addition to significant financial resources to continue to grow our position in North America,” Bray told the Canadian Packaging magazine in a recent interview.
“For its part, Flexstar Packaging provides TC Transcontinental Packaging with an expanded North American footprint to the West Coast, an experienced, highly skilled workforce, and some unique capabilities such as radial laser scoring and new blown film specifications.”
Employing 135 people, the company’s vertically-integrated Richmond operations comprise a state-of-the-art 61,000-square-foot film extrusion facility and a next-door 30,000-square-foot converting facility housing all the slitting, bagmaking and radial laser scoring equipment.
Throughout most of the year, both facilities operate on a busy 24/7 production to produce high-quality flexible packaging—both rollstock and pre-made bags—for customers in the cereal, granola bars, confectionery, frozen foods and coffee markets, Bray relates.
“Over 90 per cent of our products are used in direct food-contact applications,” he notes, “and while we ship our products across North America, our primary focus is on western North America.
As Bray explains, Flexstar Packaging has continually invested in the most technologically advanced production and converting equipment right from the outset, combined with ongoing skill training for its machine operators and all other employees to maximize its technology investment.
“We find that our location provides a very good environment to find a skilled and educated workforce to support our growth in technology and machinery,” says Bray, “and we have been successful in adjusting our schedule for peak demands by cross-training our workforce to increase our production flexibility.”
The formidable combination of best-of-breed technology, process expertise and a highly-trained workforce has played a large part in making Flexstar an attractive investment proposition for TC Transconti
nental Packaging to extend its North American footprint, Bray reasons.
“It was a very good cultural fit and the transition process has been excellent,” he states.
“We also believe that the acquisition allows us to better optimize our production and better support our customer base.
“As part of TC Transcontinental Packaging, we are happy to move forward driven by its vision to be a North American leader in flexible packaging,” Bray proclaims.
“We are very confident that the years ahead will be successful and marked by many notable accomplishments.”
BEST IN THE WEST
According to Bray, Flexstar’s confident mindset is well-supported by an impressive list of technological innovations and breakthroughs that the company has been able to bring to market over the years, including:
- Being of the first converters in western North America to offer HD Flexo printing process capabilities, developed by leading global prepress technologies supplier ESKO, using high-quality digital printing plates to superior print quality rivaling that of gravure and offset printing;
- Developing several commercial retort lidstock and numerous hot-fill applications for liquids using its pre-made pouch technology;
- Developing many internal blown film specifications for specialty packaging applications;
- Developing unique laser-scored opening features and perforation patterns using an advanced web radial laser score technologies, with further investment in this technology planned for 2018;
- Working jointly with Dow Chemical Canada to develop a recycling-ready multilayer barrier pouch that qualifies for the How2Recycle label certified by the Sustainable Packaging Coalition (SPC).
“We are the most vertically integrated flexible packaging operation in western North America,” says Bray.
Boasting a wealth of advanced leading-edge production and converting technologies that includes three flexo presses, three laminators, three bag machines, blown film extrusion, slitting, and laser scoring/perforations.
“We are a full service shop and can do full graphic separations, HD flexo printing, expanded gamut printing and internal platemaking,” Bray points out.
“Our facility has been undergoing investment and change since our inception in 2005, and every piece of equipment we operate is new,” says Bray.
“It is all part of the transformation of this facility to be a highly technical, full-service convertor to support our growing customer base,” he states.
“We have followed a strategic investment platform and have developed a flexible machine roster—a key in providing the service levels required for our customers to be successful in their business.”
Bray says the flexible packaging industry, like other packaging sectors, is constantly challenged by rising customer expectations for superior quality and service, as noted by pronounced trends to:
- Shorter lead times. “Improving the product speed-to-market has created the need for us to improve our overall manufacturing flexibility to manage short turnarounds, un-anticipated opportunities and new product launches,” Bray explains;
- Enhanced Graphics. The need to create more effective shelf appeal for the product through HD (high-definition printing) expanded gamut printing, metallic inks, spot matte coatings and other value-added features;
- Technology. Utilizing new materials and package features like laser-score opening, venting for frozen microwave applications, alternate barrier materials to increase product freshness, etc.;
- Information. Using ERP (Enterprise Resource Planning) data to improve shipping, invoicing, and inventory accuracy.
“This also helps us manage raw mate-rials by using historical usage information across the customer base,” says Bray.
“Today’s consumer trends towards healthy eating, convenience, snacking, sustainability and mobile technologies are all driving demand for new packaging innovations, designs and formats,” he notes.
In addition to addressing these key marketplace trends, Flexstar Packaging is also keenly aware of its CSR (corporate social responsibility) obligations insofar as reducing the company’s environmental footprint, Bray asserts.
“Flexstar is a leader in Western Canada in terms of sustainability programs, having made significant strides in material recovery, waste reduction and recycling,” Bray states.
“We separate our wastestreams and recover over 95 per cent of our raw material scrap, which earned us a 2008 BC Export Award for sustainability,” he notes.
According to Bray, the Richmond plant is also planning to begin installing a high-efficiency 50,000-cfm (cubic feet per minute) regenerative thermal oxidizer by the end of this year, which will enable it to capture and destroy over 98 per cent of the VOCs (volatile organic compounds) generated by the facility’s operations.
Bray says he is very encouraged by the fact that Flexstar Packaging and TC Transcontinental Packaging are both on the same page in respect to environmental sustainability and other key CSR objectives.
“For TC Transcontinental, social responsibility is all about achieving sustainable profitability in the pursuit of its business activities, while safeguarding a healthy environment and being engaged in the communities we serve,” says Bray, exuding plenty of optimism about Flexstar’s future business prospects as part of the TC Transcontinental Packaging group.
“I believe that TC Transcontinental Packaging has grown the way it has because of its obsession with anticipating its customers’ needs,” Bray opines.
“We intend to follow this path by constantly evolving to stay close to our customers and partnering with them to ensure their success, since their success is our success.
“If we continually move forward and improve, we feel we can maintain our edge on any competitor by focusing on delivering the highest possible level of value, quality, product performance and speed-to-market.
Says Bray: “This is a competitive business, with plenty of competition from both North American and off-shore converters.
“Because we produce a very wide range of products, we have many competitors,” he concludes, “but having said that, we are very confident in our abilities to listen to our customers attentively, to understand their needs, to deliver optimal packaging solutions to preserve their products, and to continue to bring them true value through continued knowledge, creativity and dedication.”