By: Bill Bregar
November 19, 2013
ATLANTA — Ira Boots, who became chairman of U.S.-based machinery manufacturer Milacron LLC last year, after building Berry Plastics Corp. into a $4 billion packaging giant, said a well-thought-out strategy and an aggressive playbook are more important than sheer size.
"It doesn't make any difference what your size is. It does make a difference what your business plan is," Boots said in a speech Oct. 8 at the Society of Plastics Engineers Blow Molding Conference in Atlanta.
Boots said it's important to understand what your company is good at, and how it could get better. He said "aggression" is the key — and a central strategy in building Berry Plastics. By aggression, he doesn't mean being nasty.
"It means you're intense. You're highly focused on where you're going," Boots said.
At the blow molding conference, Boots talked about Berry Plastics and Milacron. Both are global players.
Boots was a toolmaker when he joined Imperial Plastics in Evansville in 1978. Imperial (which later became Berry) had just $4 million in sales and 40 employees — Boots was No. 40.
Imperial had some problems, but employees worked every day as a team, and by 1989, sales grew to $50 million. The packaging maker was innovative, and employees drove costs down.
"Those are all great attributes, but the one thing we didn't have was scale," Boots said. "We knew at that point that we would be a niche molder forever."
It was gut-check time. "We had a choice. We had either to look up and say we're going to be the world's largest global packaging company, or we're going to stay as a really, really good niche player," he recalled.
The decision made history. Berry grew rapidly, often through acquisition financed by private equity.
Boots, a plain-spoken guy who still looks like he could machine a mold, knows his way around Wall Street.
When he left Berry in 2011, it employed 18,000 people and generated sales of $4.4 billion. Berry reported 20 straight years of growth in sales and EBITDA (earnings before interest, taxes, depreciation and amortization).
"When we launched our business plan, we looked at it as a very tactical approach. Everything we did, we made with aggression," he said.
Boots said Berry got help along the way from suppliers and customers, as it worked to improve operations and crack new markets.
He credited two people: Robert Schad, founder of Husky Injection Molding Systems Ltd., and Surendra Agarwal, an Indian industrialist who is president of Creative Group of Industries in Mumbai.
Boots recalled Schad telling him, "You will either automate or you will die."
"From that day on," Boots said, "every capital purchase that we made, every thought of a process, everything that we did as a company — always, we thought how we could automate."
Boots said automation is even more important today, when competition includes companies in low-wage countries. "You've got to neutralize the labor costs," he said.
Agarwal was a consultant for Kraft Foods Inc. when Boots met him in 1998. Agarwal told him about the challenges of thermoforming polypropylene.
"He said if you can figure out how to do this on a large platform — of melting polypropylene and controlling it — you can control the [fast-food] drink-cup market," Boots said.
Berry did just that — and became a dominant drink-cup maker. PP took the market for polystyrene.
Agarwal was at the Atlanta conference, asking questions and grilling speakers for details. Boots said industry meetings are important. "The people inside this room, there's so much knowledge, there are so many people that can help you."
Boots also talked about the global perspective for blow molding and packaging.
He said Western Europe and the United States "are going to be flat." But they are still huge markets. That takes a different strategy, of innovation. Sometimes companies don't invest as much for technology or new products in developed markets because of the slow rate of growth.
Boots said that's a mistake.
"You're going after a market that's mature. You have to do that by building a better mousetrap, at a lower cost."
Growth rates will be much higher in developing nations, he said. Success there requires getting a global presence. For small companies, that can mean an alliance with another small company overseas, he said.
Boots said Uniloy Milacron is ready to help. For example, in the dairy market, Uniloy offers extrusion blow molding machines with coextrusion to add a barrier layer, and a sterile production environment. This helps deliver milk, without the need for refrigeration, to developing countries or people in remote areas, who may have not had good access to dairy products before.
Milacron named Boots as Milacron chairman in mid-2012. Boots said he was looking forward to some charity work, but could not pass up the opportunity to help lead the only remaining major plastics machinery manufacturer in the United States.
He said Milacron has an installed base of about 30,000 injection molding machines, blow molders, extruders and structural foam machines around the world. The company employs 4,000 people. Milacron made a big acquisition earlier this year, buying Mold-Masters Ltd., the hot-runner maker.
"We're growing vibrantly. We have done that by adding innovations," Boots said.
He said Milacron is working with Mold-Masters to bring advanced hot-runner technology to blow molding. One result: closed-loop control of the co¬injection process, with a balanced manifold design, servo-electric valve gate and precise hot runners.
The Iris coinjection can handle as many as 24 cavities, and allows coinjection of different materials for blow molding, he said.
Boots said Uniloy is working on some groundbreaking technologies. Some of the innovations "are going to look a little alien, like nothing you've never seen before," he said.