Note: The sale of SCA Packaging North America to Metalmark Capital was completed and announced March 27.
Packaging World: Why change the name from SCA Packaging North America to Tegrant Corporation?
Ron Leach: This change was brought about by SCA’s decision to divest its North American packaging business. SCA intends to use the proceeds from the sale to fund further investments in its tissue and hygiene businesses around the world.
PW: Where does the name Tegrant come from?
Leach: In choosing a new name for the company, we ran through a formal process with an outside firm that had developed identities for many of the top Fortune 500 firms. After the success we had achieved as SCA Packaging North America, we wanted a new name that allowed us to build off of the positive equity we had acquired in the marketplace, but also allowed us to grow and re-define the markets we were serving.
We chose Tegrant because of its strong and established tone, and its close proximity to the word “integrity." We believe in the integrity of our people, the integrity of the packaging we produce, and the integrity of the products we help protect.
PW: Does this involve a restructuring or realignment of business units, especially for packaging?
Leach: The four business units of the company will remain unchanged. We will continue to focus our business on temperature assurance products, consumer packaging and machinery, construction building products and protective packaging and component solutions.
PW: What synergies arise from this change, and how will customers old and new benefit?
Leach: One significant change will be that the company will now be entirely under the control of its North American based management team and board of directors, as opposed to a board of directors based in Stockholm. I believe this will certainly make for a more nimble organization, one that is able to make strategic decisions quicker and act on them in a timely manner. Both old and new customers will benefit as we look to deploy our capital aggressively in our existing plants, while also seeking out new opportunities for additional products and services to support them.
PW: What does this change mean for the packaging industry?
Leach: One thing it means is that the industry will get re-acquainted with a longstanding and familiar brand name – Alloyd. Effective as of April, the business unit formerly known as SCA Consumer Packaging will be relaunched as Alloyd Brands. For over 20 years, the Alloyd name has been synonymous with quality thermoformed plastic packaging, and the machines that seal it. Now, under Tegrant Corporation, the Alloyd Brands name will be re-introduced over the consumer packaging business, with a new look and logo that connects with our past, but also hints at the exciting new additions we intend to make there.
PW: You've indicated that Tegrant plans to grow into a world-class company. How will that happen?
Leach: I believe that what Metalmark saw was already a world-class company, and one that was poised for growth under a new owner that would be willing to invest in it. I believe that Tegrant already has the following advantages in the marketplace:
• A leadership position in each of the markets it serves
• An attractive customer base with a high retention rate
• Proven engineering and manufacturing expertise
• Exciting organic and acquisition growth potential
• A proven management team and an experienced workforce
PW: The company's mission statement says that it will "continually delight" customers. How will that be done?
Leach: By capitalizing on these strengths, we are able to delight our customers in a number of ways, including innovative designs, quality manufacturing, and an extensive network of testing laboratories which help them qualify the packaging solutions we supply them. Our highly trained sales force and customer service departments keep them engaged and ensure that our businesses are aligned as their needs evolve.
PW: You're well-positioned to comment on industry trends, and one of those is a continuing of mergers and acquisitions of which your company's example is one of the latest. What do you see happening?
Leach: While it is certainly not new, we do see a continuation in the trend towards vendor consolidation. Both large and mid-sized manufacturing companies are continuing to look for greater supply chain efficiencies that can only come about by strategically aligning themselves with their suppliers. Tegrant Corporation has facilitated this trend amongst its current customer base by negotiating and agreeing to multi-year supply agreements with many of its key customers. We intend to continue to pursue these types of relationships aggressively in the years ahead.
PW: What kind of packaging developments is your company working on?
Leach: In 2005 we established a corporate research & development center in New Brighton, PA, called the “Center of Excellence”. Since its inception, the Center has been devoted to not only developing, testing and designing in the latest materials used for packaging, but also taking existing materials and finding new and unique ways to use them in combination packaging. In both instances we tend to focus on solutions that offer better product protection and cube utilization whenever possible.
For example, this past year the Center helped identify and test new starch based materials that could be used effectively in cushion based packaging applications. At the same time they were also designing new packaging solutions from traditional EPS foams that we think will revolutionize the way major appliances are stored and shipped in North America. In addition to the work being performed at the Center of Excellence, we are also planning several new product launches at our ThermoSafe Brands and Alloyd Brands business units. It’s an exciting time to be working in packaging, and Tegrant Corporation is poised to help lead the way forward.
Other resources:
This news announcement: SCA Packaging North America is now Tegrant Corp., published March 27th, 2007
An audio interview (different than the above Q&A): Tegrant president and CEO Ron Leach speaks, posted April 10th, 2007
