Emerald's Kelly carries on family tradition, wins Leo Shluker award

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Erin Jaeb photo Kevin Kelly

Packaging executive Kevin Kelly advocates for industry technical education, opposes bag bans and oversaw a West Coast trade association's transformation. Observers say he holds strong beliefs and tenaciously pursues his objectives.

Perhaps those are reasons why Kelly, CEO of flexible packaging manufacturer Emerald Packaging Inc., recently received the Western Plastics Association's highest honor, its 2013 Leo Shluker Award.

His father, James P. Kelly, won the 1987 and 1996 Leo Shluker Awards and retired in 2002 when Emerald had sales of $18 million. He sold the business to his three children in 2008 and continues to contribute his knowledge.

WPA represents the broad interests of the plastics industry in the western U.S. states and Canadian provinces. WPA grew from the base of the California Film Extruders and Converters Association, which was formed in 1973 primarily serving the film and bag industry.

"I think there was always a sense we needed a West Coast organization because the issues out here are different than nationally," Kelly said in an interview. "California companies need to be more proactive to deal with bans than just imposing them."

Since 1998, Kelly has served two terms as president of the association and three terms as vice president.

In May 2011, "when we changed over, there were about 50 members, and now we have about 100," said Laurie Hansen, executive director of Sacramento, Calif.-based WPA.

"A lot of the increase is thanks to Kevin."

Kelly credits the gains mostly to the leadership of Hansen and WPA President John Picciuto of Tustin, Calif., western market manager for H. Muehlstein & Co. Inc., one of Emerald Packaging's resin suppliers.

"Kevin has been diligent with an industry-first approach," Picciuto said.

"His selfless efforts have improved the industry in the West for all processors."

CFECA began the Leo Shluker Award in 1985 in recognition of the group's founder and first president, and WPA continues the tradition.


In advocating for the plastics industry, Kelly has led efforts of WPA and CFECA to oppose potential bag bans in various local California jurisdictions and, as a plaintiff, through litigation involving the city of Oakland.

Kelly "understood the broader implications to the plastics industry and understood that any ban was a dangerous precedent," said Catherine Browne, general manager of Crown Poly Inc. in Huntington Park, Calif. "Not all [association] members agreed, and he took a bold position, which is what a leader does."

Pete Grande, CEO of Command Packaging in Vernon, Calif., said, "Kevin was the star [industry] witness in the Oakland attempt to ban plastic bags. His business would not have been affected by the ban, but he testified at the public hearing in a compelling way that swayed the opinion of the policymakers."

Kelly notes that the industry in California has "tried to develop plastic products that allow us to meet requirements for carryout sacks of 2½ mils and exclusions about bags that reach a certain mil thickness."

He said he sees value in seeking to reduce the volume of plastics entering landfills. He cited the benefits in a new project of Command Packaging's Encore Recycling unit to process used agricultural polyethylene film and drip tubing in a Salinas, Calif., facility beginning in October.

"California manufacturers are being proactive to oppose the anti-plastic measures, and I find that encouraging," Kelly said. With legislators and the public, "the image of plastics in California is very rough."

"As members of the industry, it is important for us to be involved as a company."

Charitable leader

Kelly, 52, "is resolute yet thoughtful," said Command's Grande. "He listens and analyzes situations and, when he acts, is decisive and committed."

Robert Bateman, president of Roplast Industries Inc. in Oroville, Calif., provides another perspective.

"Anyone who has visited [Kelly's] office will have seen the poster of Bobby Kennedy and his dog which hangs on the wall. Well, Kevin looks a bit like a stretched out Bobby and was about the same age as the new Attorney General Bobby Kennedy when he took control of Emerald. He shares many of Bobby's strengths" including being direct, forceful and sometimes ruthless.

Kelly "can be quite aggressive and unreasonable in approaching situations where he thinks he is right," Bateman noted.

"Kevin is highly intelligent and has a global perspective," said Crown Poly's Browne. "He also has a history of personal philanthropy and charity, which leads him to be charitable in his business life as well," sharing information, knowledge and advice "to help other business executives be successful."

Bateman, Grande and Browne are past presidents of the association and received the Leo Shluker Award in, respectively, 2000, 2009 and 2011.

The Kelly family donates 10 percent of company profits to catholic schools and financial aid programs that support those schools. Kelly serves on the boards of Bishop O'Dowd High School in Oakland, the Diocese of Oakland schools financial aid board and the President's Advisory Committee of St. Joseph's High School. Recently, he joined the board of the Corporation for Manufacturing Excellence, part of the federal government's manufacturing extension program.

Kelly graduated from California's Santa Clara University with a bachelor's degree in political science and the London School of Economics with a master's degree in economics.

He worked for nine years as a journalist with McGraw-Hill's BusinessWeek in the magazine's Los Angeles, Dallas and Chicago bureaus.

Kevin joined Emerald Packaging in 1996, held various positions in the company and became CEO in 2002.

Over 15 years, BusinessWeek, the former Fortune Small Business magazine and the newsweek.com website published Kelly's periodic articles about running a business.

Kelly and his son, Cormac, 15, participated in early July with other Civil War history hobbyists in the 150th anniversary re-enactment of the battle of Gettysburg in Pennsylvania.

Kelly and his wife, Erin Jaeb, also have two daughters. Erin is a board member of the regional California Shakespeare Theater.

Asked about his self-image, Kelly characterizes himself as "a competent manager who gets it right sometimes."

"If I am batting .333, that is pretty good."

Adapting to change

For Emerald Packaging's operations, "we have hired well and have a great management team," Kelly said. Staff engineers ? three in polymer technologies and two in industrial systems ? "can create new films, help suppliers, implement lean processes and troubleshoot for customers."

Union City, Calif.-based Emerald Packaging is investing about $2.5 million for equipment during 2013. The firm is buying a laminator from Nordmeccanica SpA of Piacenza, Italy; a laser perforating unit from Preco Inc. of Lenexa, Kan.; an Inno-Lok pre-zippered roll stock machine from Hudson-Sharp Machinery Co. of Green Bay, Wis.; and a pouch-making unit from Totani Corp. of Kyoto, Japan.

Emerald began a business initiative seven years ago in a produce-growing area of central Mexico. "We are doing about $3 million there now," Kelly said.

The company exports salad packaging to produce packers in the state of Guanajuato and leased a warehouse there in Irapuato in 2010.

In 2012, an Alameda County business waste-prevention fund awarded a grant of $50,000 to Emerald Packaging to implement packaging machinery improvements that were expected to achieve annual source reduction of 325 tons of plastic packaging.

In 2009 under a county mini-grant, Emerald purchased reusable plastic cores that can last through hundreds of uses and replaced cardboard cores suitable for two uses. Emerald saves about $20,000 per year and prevents annual generation of 50,000 pounds of cardboard waste, according to the company.

Alameda County's waste management authority and source reduction and recycling board manage the StopWaste business partnership program. The county certified Emerald as a "green business" in 2010 and renewed the three-year designation in 2013.

In addition to resins from H. Muehlstein & Co., Emerald Packaging buys specialty polymer films from the engineered films division of Next Generation Films Inc. in Lexington, Ohio.

Toll contractor Commex Corp. in Hayward, Calif., extrudes Emerald-purchased resin for low-cost commodity films. "We have been working with them for 25 years," Kelly said.

In turn, Emerald manufactures forms of wicketed and wicketless bags, form-fill-seal roll stock and tapered gusset bags for packaging vegetables, fruits, bakery goods, frozen foods and processed foods. Customers include D'Arrigo Brothers, Fresh Express, Grimmway Farms, Integrated Bakery Resources, River Ranch Fresh Foods, Taylor Farms, Wada Farms and Wawona Frozen Foods.

Emerald prints more than 500,000 pounds of film weekly on four printing presses including a 10-color Windmoeller & Hoelscher acquired in late 2011.

The company operates a natural-gas-fired regenerative thermal oxidizer from Ship & Shore Environmental Inc. of Long Beach, Calif., to capture volatile organic compound emissions from solvent-based inks used in printing glossy plastic retail bags. The system went into use in January 2001.

Emerald employs 250, operates in 200,000 square feet of space in Union City and reported sales of more than $77 million for the fiscal year ended Aug. 31. The company had sales of $72 million in the previous fiscal year.

At age 83, James P. Kelly "still comes into the office, and we have lunch and discuss strategic issues," Kelly noted. "He has been in the industry since 1956. He is as sharp as a nail and in great physical shape."

Kevin Kelly's brother, James M. Kelly, is executive vice president for key accounts and their sister, Maura Kelly Koberlein, is executive vice president in charge of production scheduling.

Command's Grande commented: "Kevin has taken a family business and made it into a professional corporation that is an industry leader and a successful model of second-generation companies."

Roplast's Bateman said Kelly has "proved to be a worthy successor to his father at the family business which under his leadership has grown to be, I think I can say without any legitimate challenge, the most successful film converter on the West Coast."